WASHINGTON, D.C. — The Securities and Exchange Commission (SEC) has filed a complaint against Giga Entertainment Media Inc., alleging the company deceived its investors regarding its Apple Store download rankings as well as faking documents to conceal the criminal record of one of its officers.
In its complaint against Giga, five previous officers and directors of the company, are accused of buying more than 500,000 downloads from marketing firms in an effort to spike the company's app "SELFEO."
According to the SEC, Giga received "a shortcut" to boost its app among Apple Store download standings but told investors the app's high ranking was from successful advertising. The SEC also says Giga officers doctored records so that investors would not learn of the company's "de facto CEO" role and past criminal charges of mail fraud.
“Exposing Giga’s fraud should remind companies that they cannot buy a crowd and then claim to be popular,” SEC associate director of enforcement Melissa Hodgman said in a statement. “Tech companies can buy clicks or employ other new marketing tools to improve their on-line image but they have to be honest with investors when touting the fruits of such efforts.”
The former Giga officers pleaded to violating antifraud and securities laws, the SEC said. Two of the former officers will pay $25,000 each in penalties and a third officer will pay $15,000 with several others agreeing to a "permanent officer and director bar," according to the SEC.