The Securities and Exchange Commission (SEC) has charged the founder and former CEO of Get Together, an erstwhile social media firm, with fraud in regard to a securities offering. The startup, known as IRL, was founded by Abraham Shafi who apparently raised over $170 million from investors. While claiming to use funds to run his business, the SEC alleges that Shafi used the money to pay for personal expenses.
According to the SEC’s complaint, Shafi claimed that IRL was a viral social media platform that organically attracted the vast majority of its purported 12 million users. IRL shuttered its doors in 2023 after admitting most of its users were fake.
At one point, the firm was valued at over $1 billion following a funding round led by noted venture investor SoftBank.
The SEC’s complaint alleges that IRL spent millions promoting the firm by incentivizing people to download its App.
Shafi is said to have hidden expenditures from offering documents that understated the company’s marketing expenses and by routing advertising platform payments through third parties.
The SEC’s complaint also alleges that Shafi failed to disclose to investors that he and his fiancée charged hundreds of thousands of dollars to IRL’s business credit cards for personal expenses, including for clothing, home furnishings, and travel.
“As we alleged, Shafi took advantage of investors’ appetite for investments in the pre-IPO technology space and fraudulently raised approximately $170 million by lying about IRL’s business practices,” said Monique Winkler, Director of the SEC’s San Francisco Regional Office. “Investors in this space should continue to be vigilant.”
Shafi is charged with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, civil money penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Shafi.
