Enforcement

SEC Charges Former CEO of Slync with Securities Fraud and Misappropriation

Feb. 14, 2023 —The SEC has charged Christopher S. Kirchner, the former CEO and co-founder of Slync, Inc., a privately-held Texas-based software company, with securities fraud and misappropriation of funds. Kirchner allegedly fraudulently offered and sold more than $67 million of securities to multiple investors, more than $28 million of which he misappropriated for personal benefit.

Misrepresenting Financial Condition to Investors

According to the SEC’s complaint, Kirchner misrepresented the financial condition of Slync to investors between approximately January 2020 and January 2022. He provided false information concerning the amount of revenue received from customers, the nature and volume of contracts with existing and potential customers, as well as the planned use of fundraising proceeds.

Misappropriation of Funds

Kirchner also allegedly misappropriated more than $28 million of the funds raised from investors between March 2020 and his termination from Slync in August 2022. He transferred tens of millions of dollars from Slync corporate bank accounts to his personal bank accounts and paid for his personal expenses directly out of one of Slync’s bank accounts. Kirchner used the money to fund his personal investment entity, KFIM LLC, pay entertainment expenses, and purchase a $16 million personal private jet. He also failed to make timely payroll distributions to Slync employees on several occasions.

Legal Action Filed Against Kirchner

The complaint against Kirchner has been filed in the United States District Court for the Northern District of Texas. The charges include violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and an officer and director bar against Kirchner. The SEC also seeks disgorgement with prejudgment interest from KFIM as a relief defendant.

Criminal Charges Filed Against Kirchner

In a parallel action, the U.S. Attorney’s Office for the Northern District of Texas has filed related criminal charges against Kirchner.


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