SEC Settles Dispute with Two Arizona Fintechs: ZipRemit and Lendaily

The Securities and Exchange Commission (SEC) has settled actions against two Arizona-based Fintechs ZipRemit and Lendaily.

The SEC that final judgments have been entered against the two firms along with CEO Gary Prior.

Without admitting or denying the allegations of the amended complaint, Pryor, ZipRemit, and Lendaily have consented to the entry of judgments permanently enjoining them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, ordering a conduct-based injunction against Pryor, and ordering:

(i) Pryor to pay disgorgement of $2,666,705 (of which $180,519 would be joint and several with Relief Defendant Rebecca Pryor), with prejudgment interest of $753,137 (of which $13,508 would be joint and several with Relief Defendant Rebecca Pryor), and a civil penalty of $2,666,705;

(ii) ZipRemit to pay disgorgement of $1,564,534, with prejudgment interest of $426,917, and a civil penalty of $975,230;

(iii) Lendaily to pay disgorgement of $311,615, with prejudgment interest of $52,388, and a civil penalty of $975,230.

Relief defendant, Rebecca Pryor, has also consented to the entry of a judgment ordering her to pay, on a joint and several basis with Pryor, disgorgement of $180,519 with prejudgment interest of $13,508.

The SEC states that the allegations stemmed from Pryor raising at least $4.3 million from investors while misrepresenting the two firms technological capabilities and revenue.

ZipRemit and Lendaily private companies that reportedly claimed to offer merchant branded consumer credit at the point-of-sale and the companies had several large national companies as customers.

The SEC alleges that Pryor repeatedly misrepresented that his companies had developed proprietary software that had been tested, approved, and launched, or was about to be launched, with customers, when, in fact, the companies had not generated any revenue and no customers had ever used their software, as it was not fully developed.

In addition, Pryor allegedly diverted at least $1.2 million of investor funds for his own personal use.



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