Netcapital charged by US SEC with fraud for allegedly inflating revenue

The U.S. Securities and Exchange Commission has charged Netcapital with securities fraud for allegedly overstating its revenue through a scheme involving consulting agreements with a co-founder of the music sharing service Napster, John Fanning. The SEC alleges that Netcapital improperly recorded nearly $14 million in revenue from these agreements, which were primarily shams and produced no real revenue for the Boston-based fintech company.

This fraudulent activity enabled Netcapital to more than quadruple its reported revenue while raising millions of dollars from investors. The company has not yet responded to requests for comment.

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