Former KIT Digital Inc. President Gavin Campion Charged with Securities Fraud
The Securities and Exchange Commission (“SEC”) charged Gavin Campion, the former president of KIT Digital Inc., with securities fraud.
The SEC’s complaint, filed in federal court in New York on November 15, alleges that over a one-year period ending in late 2011 Campion – along with Kaleil Isaza Tuzman, then KIT Digital’s CEO, and Robin Smyth, then its chief financial officer – caused KIT Digital to recognize more than $25 million in false revenue from at least a dozen sham license agreements that inflated KIT Digital’s publicly reported financial results. As a result of this allegedly fraudulent conduct, from approximately 2010 to mid-2012, KIT Digital allegedly filed with the SEC quarterly and annual reports and annual and interim financial statements that falsely and materially overstated the company’s revenue, goodwill, and cash equivalents and materially understated its losses by millions of dollars.
The SEC previously charged Smyth and Isaza Tuzman with securities fraud; the litigation is ongoing. In addition, the U.S. Attorney’s Office for the Southern District of New York today filed a parallel criminal case against Campion.
The SEC’s complaint alleges that Campion violated Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5 and 13b2-1 thereunder, and aided and abetted violations of Section 17(a) of the Securities Act and Sections 10(b) 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest and penalties as well as permanent injunctive relief and an officer-and-director bar.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]m. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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