SEC v. Paul D. Roberts, No. 1:24-cv-06990, Southern District of New York (Sept. 16, 2024) — Complaint

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GREGORY A. KASPER
[email protected]
JODANNA L. HASKINS (pro hac vice application forthcoming)
[email protected]
IAN J. KELLOGG (pro hac vice application forthcoming)
[email protected]
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

- against –

PAUL D. ROBERTS,

Defendant.
Case No. 24-cv-6990
COMPLAINT FOR INJUNCTIVE
AND OTHER RELIEF

JURY TRIAL
DEMANDED

Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”), for its
Complaint against defendant Paul D. Roberts (“Roberts” or “Defendant”), alleges as follows:
SUMMARY
1. Roberts, the former President, Interim Chief Executive Officer (“CEO”), and
Chairman of Kubient Inc. (“Kubient”), engaged in a scheme to fraudulently inflate Kubient’s
2020 revenue in advance of a planned initial public offering (“IPO”). Roberts touted the phony
revenue and asserted that it demonstrated that Kubient’s flagship product, Kubient Artificial
Intelligence (“KAI”), was successful. Based on the phony revenue and Roberts’s claims of
KAI’s success, unsuspecting investors poured over $30 million into Kubient.
2. In reality, Kubient’s use of KAI, a product that purportedly detects real-time fraud
during digital advertising auctions, had not generated any meaningful revenue. Roberts
fabricated fraud analyses that he claimed were prepared by KAI for two customers as part of a

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beta test despite Kubient not even obtaining the customers’ data to analyze. Roberts further
claimed that Kubient received over $1.3 million in “revenue” for analyzing the customers’ data
when, in fact, Kubient never performed the analyses to generate revenue.
3. Roberts then lied to Kubient’s independent auditor concerning the revenue at
issue and whether he was aware of any risks relating to the company’s revenue, allowing
Kubient to continue to rely on its claims of the success of the KAI tests and phony revenue in
offering materials and in its Form 10-K for 2020.
NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF
4. The SEC brings this action pursuant to the authority conferred on it by Section
20(b) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b)] and Section 21(d) of
the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78u(d)]. The SEC seeks a
permanent injunction against Roberts, enjoining him from engaging in the transactions, acts,
practices, and courses of business alleged in this Complaint and from violating, directly or
indirectly, the laws and rules alleged in this Complaint; disgorgement of all ill-gotten gains from
the unlawful activity set forth in this Complaint, together with prejudgment interest; civil
penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section
21(d) [15 U.S.C. § 78u(d)]; and an officer and director bar pursuant to the Court’s equitable
authority, Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2)
[15 U.S.C. § 78u(d)(2)].
JURISDICTION AND VENUE
5. This Court has subject matter jurisdiction pursuant to Securities Act Sections
20(b), 20(d), 20(e), and 22(a) [15 U.S.C. Sections §§ 77t(b), 77t(d), 77t(e), and 77v(a)] and
Exchange Act Sections 21(d), 21(e), and 27(a) [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

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6. Roberts, directly or indirectly, made use of the means or instrumentalities of
interstate commerce, or of the mails, or the facilities of a national securities exchange in
connection with the acts, practices, transactions, and courses of business alleged in this
Complaint.
7. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act
[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of
business alleged in this Complaint occurred within the Southern District of New York, Roberts
transacted business in this District, and he worked for Kubient, which at all relevant times had its
principal place of business within this judicial district in New York, New York.
DEFENDANT
8. Paul D. Roberts, age 47, is a resident of Melville, New York. He served as
Kubient’s Chief Strategy Officer, President, and Chairman beginning on approximately May 15,
2019. On October 31, 2020, Roberts became Kubient’s Interim CEO. On December 16, 2021,
Roberts was made CEO. Roberts resigned as Chairman and CEO/President on September 22,
2023, and November 2, 2023, respectively.
RELATED ENTITY
9. Kubient, Inc. is a Delaware corporation based in New York, New York.
Kubient’s common stock is registered with the Commission under Section 12(b) of the Exchange
Act. Kubient was quoted on the NASDAQ Capital Market under the ticker symbol “KBNT”
beginning on August 12, 2020, until it was delisted on November 17, 2023. Unsolicited
quotations for Kubient’s common stock are currently quoted on OTC Link.

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FACTUAL ALLEGATIONS
I. Kubient and KAI
10. During the relevant period, Kubient was a technology company that provided
services to the digital advertising industry via a cloud-based software platform.
11. According to Kubient, its flagship product KAI detected fraud when companies
were buying or selling advertisements on digital platforms, such as Google. These purchases
were typically made during real-time auctions for that digital ad space. As digital advertising is
typically priced by how often the advertisement is viewed, KAI purported to detect when those
views are not by humans but by software programs designed and implemented to inflate those
views to increase the price of the advertising.
II. Kubient’s IPO and Secondary Offering

12.  Kubient engaged in two securities offerings—the IPO took place in August 2020
and the second public offering took place in December 2020.
A. IPO
13. The offering materials for Kubient’s IPO included an S-1 registration statement
and prospectus (“IPO Offering Materials”). The final IPO Offering Materials were filed and
made effective on August 11, 2020.
14. Kubient raised approximately $12.5 million as a result of its IPO.
B. Secondary Offering
15. Beginning on December 22, 2020, approximately four months after its IPO,
Kubient conducted a secondary offering of its common stock.

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16. The offering materials for Kubient’s secondary offering included an S-1
registration statement and prospectus (the “Secondary Offering Materials”). The Secondary
Offering Materials were filed on December 21, 2020, and made effective on December 22, 2020.
17. Kubient raised approximately $20.7 million as a result of its secondary offering.
III. Roberts Engaged in Deceptive Acts and Practices to Falsely Inflate KAI Revenue,
Resulting in Kubient Recognizing Improper Revenue.

18. Roberts engaged in deceptive acts and practices to falsely inflate KAI revenue by
instructing Kubient employees to fabricate KAI fraud analysis reports; instructing Kubient’s
former Chief Financial Officer (“CFO”) to send the fabricated fraud analysis reports to Kubient’s
independent auditor; and causing Kubient to record $1.3 million in revenue despite knowing the
performance obligations associated with that revenue had not been satisfied.
19. Prior to the first quarter of 2020, Kubient had not generated any meaningful
revenue from KAI. By late 2019, running short of funds and Kubient’s efforts to attract
investment from private equity funds failing, Kubient planned to offer shares to the public
through an IPO. For the IPO to be as successful as possible, Kubient needed to show that KAI
worked effectively in detecting fraud and that there was interest in and revenue from the product.
20. In or about the fourth quarter of 2019, Kubient entered into transactions with two
customers (collectively, the “Customers”) whereby (1) Kubient would provide a KAI “beta test”
fraud analysis to each of the Customers for a total of $1.3 million (the “KAI Deal”), and (2) the
Customers would sell data to Kubient for approximately the same dollar amount.
A. Kubient Did Not Perform Under the KAI Deal and Roberts Engaged in Deceptive
Conduct to Hide Kubient’s Failure to Perform.

21. The contract for the KAI Deal provided that the Customers would transfer data to
Kubient, Kubient would scan that data with KAI, and Kubient would then provide KAI fraud

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analysis reports (the “KAI Reports”) to the Customers. However, none of these contractual
obligations were performed because the Customers never provided Kubient with data for a KAI
analysis.
22. In the first quarter of 2020, Kubient recorded $1.3 million in revenue for the KAI
Deal, constituting nearly all of Kubient’s revenue that quarter, and approximately 95% of the
company’s revenue at the time of its IPO in August 2020. Because the Customers never provided
any data for Kubient to scan, and Kubient had not in fact performed the work contracted for,
revenue should not have been recognized.
23. Roberts knew or was reckless in not knowing, and should have known, that none
of the performance obligations set forth in the contract for the KAI Deal were satisfied.
24. During the first quarter of 2020, the CFO asked Roberts for the KAI Reports to
provide to the independent auditor to support the revenue.
25. In response, Roberts created fictitious KAI reports to support Kubient’s revenue.
To do so, he first instructed a Kubient employee (“Employee 1”) to create two electronic
folders—named for the Customers—under the pretext of creating a “sample.” Roberts did not
provide Employee 1 with any Customer data but told Employee 1 to populate the folders with
“our own data.” Employee 1 did so, inserting existing data from other Kubient customers into the
folders.
26. Roberts instructed another Kubient employee (“Employee 2”) to create “sample”
KAI reports, indicating that the reports would be shown to bankers during the company’s
upcoming IPO road show.

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27. Roberts then provided Employee 2 with the information he wanted the employee
to plug into the “sample” KAI reports, including the amount of fraud KAI had purportedly
detected.
28. Employee 2 asked Roberts for the data to be analyzed by KAI. In response,
Roberts told Employee 2 that there was no actual data to be analyzed and reiterated that these
were simply “sample” reports.
29. Employee 2 created the “sample” KAI Reports, as directed by Roberts, and sent
them to Roberts on March 24, 2020.
30. On March 25, 2020, the day after Employee 2 sent Roberts the KAI Reports they
had prepared, Roberts emailed the reports to the CFO to provide to the independent auditor as
support for the $1.3 million in revenue from the KAI Deal.
31. In reviewing the KAI Reports, the CFO noticed the quantity of data that had been
allegedly analyzed differed from the quantity of data for which the Customers had been invoiced
the previous quarter. Instead of inquiring further about the discrepancy, the CFO asked Roberts if
the CFO should change the numbers reflecting the quantity of data analyzed in the KAI Reports
to match the numbers in the invoices, to which Roberts replied “yes.”
32. As agreed to with Roberts, the CFO then changed the KAI Reports before
emailing these reports, in addition to the underlying KAI Deal contract and invoices, to the
independent auditor, copying Roberts.
B. A Kubient Employee Raised Questions about the KAI Deal Revenue, and Roberts
Again Engaged in Deceptive Conduct to Conceal the Improperly Recognized
Revenue.

33. On December 22, 2020, a high-level Kubient employee who co-developed KAI
(“Employee 3”) discovered that the data purportedly provided by the Customers for the KAI

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Deal did not originate from the Customers. After opening the electronic folders containing the
data that was supposed to be analyzed in connection with the KAI Deal, Employee 3 discovered
that the data originated from other Kubient customers.
34. That same day, Employee 3 reported his findings to Kubient’s Audit Committee
Chair (“AC Chair”). During Employee 3’s conversation with the AC Chair, Employee 3 advised
the AC Chair that Kubient had not scanned any of the Customers’ data, that the folders
purportedly holding the Customers’ data contained data from other Kubient customers, and
questioned whether Employee 3’s discovery could be the result of fraud.
35. The AC Chair then discussed the issue with Roberts as well as the CFO and
Kubient’s outside securities counsel.
36. As a result, Roberts called a representative of the Customers on December 23,
2020.
37. On December 28, 2020, after being asked by the CFO for an update on “last
week’s fiasco,” Roberts told the CFO he had a “solution in place” and would send an email
shortly.
38. On December 29, 2020, Roberts sent an email to the Customers (copying the
CFO) stating, in relevant part:
During  a  recent  internal  review,  we  discovered  that  the  data  used
during  [our  fraud  prevention]  test  may  not  have  originated  from
[you].  I  apologize  for  this  and  would  like  to  offer  a  solution  that
satisfies you and your team. Kubient can retest your data using KAI
at no cost as per the agreement terms or offer any suitable solution
you can provide. Please let me know how you would like to proceed.

39. Later that day, the Customers responded as follows:

After  connecting  with  the  team  internally,  everyone  agreed  that
during those 90-days we received a ton of value from your team. We

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all  appreciate  the  offer  to  rescan  our  traffic,  however  we  are  very
satisfied with west [sic] we received . . . .

C. Revenue is Improperly Recognized.

40. In the first quarter of 2020, Kubient recognized $1.3 million in revenue based on
the KAI Deal. That revenue was reflected in financial statements included in Kubient’s second
and third quarter 2020 Forms 10-Q, 2020 Form 10-K, and IPO and Secondary Offering
Materials. The improper revenue was also reported in Kubient’s earnings releases and associated
Forms 8-K, and earnings calls for the second and third quarters of 2020 as well as year-end 2020.
41. The $1.3 million in revenue should not have been recognized because the
performance obligations for the KAI Deal were not performed in accordance with the applicable
accounting standard for revenue recognition: Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers
(“ASC 606”).  As such, the recognized revenue was not in conformity with Generally Accepted
Accounting Principles (“GAAP”).
42. In a memo provided to the independent auditor in May 2020, justifying Kubient’s
accounting treatment of the revenue from the KAI Deal, the CFO, relying on false information
provided by Roberts, confirmed Kubient received the data from the Customers.
43. Roberts knew or was reckless in not knowing, and should have known, that the
revenue should not have been recognized.
44. The revenue recorded from the KAI Deal was material as it constituted nearly all
of Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue
at the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual
revenue. Moreover, it is likely the IPO would not have been underwritten had the underwriter
known about the fraudulent KAI Deal revenue.

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IV. False and Misleading Statements in Offering Materials and Filings.

A. Kubient, Aided and Abetted by Roberts, Made False and Misleading Statements
Prior to Kubient’s IPO.

45. After fraudulently recognizing revenue from the KAI Deal in the first quarter of
2020, Kubient spent the next several months preparing for its IPO.
46. At the time of Kubient’s IPO in August 2020, Roberts served as Kubient’s Chief
Strategy Officer, President, and Chairman.
47. In those roles, Roberts reviewed, approved, and, at least in part, drafted the IPO
Offering Materials filed on August 11, 2020, which contained numerous false statements.
48. The IPO Offering Materials highlighted Kubient’s $1.3 million successful sale
and “beta test” of its KAI product to the Customers.
49. Kubient’s IPO Offering Materials, filed on August 11, 2020, provided, in relevant
part:
During  the  quarter  ended  March  31,  2020,  we  allowed  two  large
enterprise  clients  to  beta  test  KAI  in  a  live  isolated  environment.
Kubient was able to successfully ingest hundreds of millions of rows
of data in real-time and provide our clients the ability to prevent the
purchase of non-human or fraudulent advertising traffic. The results
from  the  two  beta  clients  indicated  that  KAI  was  identifying  and
preventing  approximately  300%  more  digital  ad  fraud  than  the
clients’ current partners. The large volume of data ingested helped
to improve our proprietary algorithms including the supervised and
unsupervised  version.  This  was  invaluable  as  it  provided  us  an
opportunity to stress test our ability to handle large scale, concurrent
input  of  data  into  our  system  which  is  then  analyzed  using  our
patent-pending proprietary machine learning technology. . . .

50. Kubient made similar false statements in other sections of its IPO Offering
Materials. For example, in a section addressing net revenues Kubient stated:
For the three months ended March 31, 2020, net revenues increased
by $1,325,107, or 2,333%, to $1,381,913 from $56,806 for the three
months ended March 31, 2019. This increase was primarily due to

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approximately $1,300,000 of revenue generated in connection with
beta testing of KAI, our fraud detection service, which commenced
during the 2020 period . . . .

51. A reasonable investor would have understood from these statements that Kubient
had successfully tested KAI using the Customers’ data and that the successful beta test yielded
$1.3 million in revenue for Kubient.
52. The statements in the IPO Offering Materials identified above were false and
misleading because the Customers never provided any data to Kubient, Kubient never scanned
any of the Customers’ data through KAI, and the $1.3 million in purported revenue was
improperly recognized.
53. The statements in the IPO Offering Materials identified above were false and
misleading when made and Roberts knew or was reckless in not knowing, and should have
known, that the statements were false and misleading because he was aware that no data had
been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis
reports were fake, and that the $1.3 million in purported revenue was improperly recognized.
54. The false and misleading statements in the IPO Offering Materials identified
above were material to a reasonable investor because the KAI Deal revenue constituted nearly all
of Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue
at the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual
revenue. Moreover, it is likely the IPO would not have been underwritten had the underwriter
known about the fraudulent KAI Deal revenue.
55. As a result of its IPO, Kubient raised approximately $12.5 million from investors.
56. Roberts aided and abetted Kubient’s false and misleading statements violations by
providing substantial assistance through the conduct described above.

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B. Kubient, Aided and Abetted by Roberts, Made False and Misleading Statements in
Kubient’s Second Quarter Report and Form 8-K Filing After the Kubient IPO.

57. Following its IPO, Kubient filed a quarterly report for the second quarter of 2020,
on September 24, 2020, that fraudulently reported the $1.3 million from the KAI Deal as revenue
in the financial statements.
58. In addition, Kubient’s second quarter report falsely stated:
During   the   .   .   .   [foregoing   six-month   period],   the   Company
recognized   revenue   in   connection   with   contracts   to   scan   a
customers’  [sic]  first-party  anonymized  data  with  KAI.  Upon
completion  of  the  scan,  the  Company  delivered  a  report  to  the
customer,  which  is  the  point  in  time  the  Company  satisfied  the
performance obligation . . . During the . . . [foregoing periods], the
Company recognized aggregate revenue of $0 [sic] and $1,300,338,
respectively, in connection with the contracts.

59. The second quarter report also falsely stated:
In addition, during the [relevant period], we allowed two clients to
beta test KAI, our fraud prevention technology powered by machine
learning.   This   testing   was   invaluable   as   it   provided   us   an
opportunity to stress test our ability to handle large scale, concurrent
input  of  data  into  our  system  which  is  then  analyzed  using  our
patent-pending proprietary machine learning technology. We were
able to successfully ingest hundreds of millions of rows of data in
real-time and provide our clients the ability to prevent the purchase
of  non-human  or  fraudulent  advertising  traffic,  which  will  lead  to
additional   improvements   to   our   technology.   While   KAI   was
monetized  in  the  first  quarter  during  beta  testing,  it  was  made
available as a stand-alone enterprise in the third quarter of 2020.

60. The second quarter report also falsely stated:
For the six months ended June 30, 2020, net revenues increased by
$1,367,494,  or  1,291%,  to  $1,473,450  from  $105,956  for  the  six
months  ended  June  30,  2019.  The  increase  was  primarily  due  to
approximately $1,300,000 of revenue generated in connection with
beta testing of KAI, our fraud detection service[.]

61. Kubient also fraudulently reported the $1.3 million in revenue from the KAI Deal
in an earnings release included with its Form 8-K filing on September 23, 2020.

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62. A reasonable investor would have understood from these financial statements and
Form 8-K that KAI yielded $1.3 million in revenue for Kubient.
63. The statements in the second quarter report and Form 8-K were false and
misleading because the Customers never provided any data to Kubient, Kubient never scanned
any of the Customers’ data through KAI, and the $1.3 million in purported revenue was
improperly recognized.
64. The statements in the second quarter report and the Form 8-K were false and
misleading when made and Roberts knew or was reckless in not knowing, and should have
known, that these statements were false and misleading because he was aware that no data had
been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis
reports were fake, and that the $1.3 million in purported revenue was improperly recognized.
65. The false and misleading statements in the second quarter report and the Form 8-
K were material to a reasonable investor because the KAI Deal revenue constituted nearly all of
Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue at
the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual
revenue.
66. Roberts aided and abetted Kubient’s false and misleading statements violations by
providing substantial assistance through the conduct described above.
C. Kubient and Roberts Made False and Misleading Statements in Kubient’s Third
Quarter Report and Form 8-K Filing After the Kubient IPO.

67. On October 31, 2020, Roberts was appointed Interim CEO of Kubient.
68. In that role, Roberts signed the quarterly report for the third quarter of 2020,
which Kubient filed on November 13, 2020. As a signer of the filings, and Interim CEO, Roberts

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had the ultimate authority over the statements, including their content and whether and how to
communicate them.
69. The third quarter report fraudulently reported the $1.3 million from the KAI Deal
as revenue in the financial statements.
70. In addition, Kubient’s third quarter report  falsely stated:
During  the  .  .  .  [foregoing  nine-month  period],  the  Company
recognized   revenue   in   connection   with   contracts   to   scan   a
customers’  [sic]  first-party  anonymized  data  with  KAI.  Upon
completion  of  the  scan,  the  Company  delivered  a  report  to  the
customer,  which  is  the  point  in  time  the  Company  satisfied  the
performance obligation . . . . During the . . . [foregoing periods], the
Company recognized aggregate revenue of $0 [sic] and $1,300,338,
respectively, in connection with the contracts.

71. The third quarter report also falsely stated:
In addition, during the [relevant period], we allowed two clients to
beta test KAI, our fraud prevention technology powered by machine
learning.   This   testing   was   invaluable   as   it   provided   us   an
opportunity to stress test our ability to handle large scale, concurrent
input  of  data  into  our  system  which  is  then  analyzed  using  our
patent-pending proprietary machine learning technology. We were
able to successfully ingest hundreds of millions of rows of data in
real-time and provide our clients the ability to prevent the purchase
of  non-human  or  fraudulent  advertising  traffic,  which  will  lead  to
additional   improvements   to   our   technology.   While   KAI   was
monetized  in  the  first  quarter  during  beta  testing,  it  was  made
available as a stand-alone enterprise in the third quarter of 2020.

72. The third quarter report similarly falsely stated:
For the nine months ended September 30, 2020, net revenues
increased by $1,592,023, or 984%, to $1,753,851 from $161,828
for the nine months ended September 30, 2019. The increase was
primarily due to approximately $1,300,000 of revenue generated in
connection with beta testing of KAI, our fraud detection service,
which commenced during the 2020 period[.]

73. Kubient also fraudulently reported the $1.3 million in revenue from the KAI Deal
in an earnings release included with its Form 8-K filing on November 13, 2020.

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74. A reasonable investor would have understood from the third quarter report and
Form 8-K that KAI yielded $1.3 million in revenue for Kubient.
75. The statements in the third quarter report and Form 8-K were false and misleading
because the Customers never provided any data to Kubient, Kubient never scanned any of the
Customers’ data through KAI, and the $1.3 million in purported revenue was improperly
recognized.
76. The statements in the third quarter report and the Form 8-K were false and
misleading when made and Roberts knew or was reckless in not knowing, and should have
known, that these statements were false and misleading because he was aware that no data had
been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis
reports were fake, and that the $1.3 million in purported revenue was improperly recognized.
77. The false and misleading statements in the third quarter report and the Form 8-K
were material to a reasonable investor because the KAI Deal revenue constituted nearly all of
Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue at
the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual
revenue.
D. Kubient and Roberts Made False and Misleading Statements in Connection with
Kubient’s Secondary Offering.

78. During the secondary offering, following Roberts’ appointment as Interim CEO,
Kubient and Roberts continued to tout the success of the KAI beta test and improperly recognize
$1.3 million from the KAI Deal in financial statements and offering materials.
79. Kubient’s Secondary Offering Materials and 2020 Form 10-K were signed by
Roberts, who stated that the $1.3 million in revenue reported in 2020 had been generated from a
highly successful beta test of KAI. As a signer of the filings, and Interim CEO, Roberts had the

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ultimate authority over the statements, including their content and whether and how to
communicate them.
80. These statements were false and misleading because a beta test of KAI never
occurred, nor could it have occurred because the Customers never provided data to Kubient to
scan through KAI, and the $1.3 million in purported revenue was improperly recognized.
81. The statements in the Secondary Offering Materials and 2020 Form 10-K were
false and misleading when made, and Roberts knew or was reckless in not knowing, and should
have known, that these statements were false and misleading because he knew a beta test of KAI
never occurred, nor could it have occurred because the Customers never provided data to
Kubient to scan through KAI, and the $1.3 million in purported revenue was improperly
recognized.
82. These false and misleading statements were material to investors because a
reasonable investor would have understood from these statements in Kubient’s Secondary
Offering Materials and 2020 Form 10-K that Kubient had successfully tested KAI with the
Customers, and that the successful beta test yielded $1.3 million in revenue for Kubient.
E. Roberts Made, or Aided and Abetted Kubient’s Making of, the Statements
Identified Above, and Kubient and Roberts Obtained Money or a Financial Benefit
from the False and Misleading Statements.

83. For each of the statements identified above in Section IV(A) and (B), Roberts
aided and abetted Kubient’s false and misleading statements violations of Exchange Act Section
10(b) and Rule 10b-5(b) thereunder by providing substantial assistance through the conduct
described above.

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84. For each of the statements identified above in Section IV(C) and (D), Roberts
reviewed, approved, and, at least in part, drafted, and/or signed the documents containing the
statements, and as the Interim CEO and Chairman had ultimate authority over the documents.
85. Kubient and Roberts, directly or indirectly, each obtained money or a financial
benefit from the statements identified above. As described above, Kubient raised approximately
$33 million from its IPO and secondary offering. In addition, Kubient obtained a financial
benefit during the relevant period from issuing stock and warrants at prices that were artificially
inflated from the fraudulent conduct.
86. Further, Kubient awarded Roberts cash bonuses which Kubient described as
follows: “(i) a $250,000 cash bonus related to Mr. Robert’s [sic] efforts in connection with the
Company’s IPO, (ii) a $250,000 cash bonus in related to Mr. Robert’s [sic] efforts in connection
with the Company’s follow-on offering, and (iii) a $90,000 contractual annual performance
bonus.” Kubient awarded the $90,000 bonus “in connection with [his] performance during
2020[.]”
V. Roberts Made Misrepresentations to Kubient’s Auditors.

87. Kubient hired an independent auditor to conduct an audit for Kubient’s 2020
fiscal year.
88. In connection with that audit, Roberts made, or caused to be made, materially
false or misleading statements and/or omissions of material facts to the independent auditor in
violation of Exchange Act Rule 13b2-2 [17 C.F.R. § 240.13b2-2].
89. On March 25, 2020, Roberts caused materially false statements to be made to the
independent auditor in connection with Kubient’s IPO by causing fabricated KAI Reports to be
provided to the independent auditor to support the fraudulent revenue reported throughout 2020.

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90. Further, on March 29, 2021, Roberts falsely represented in Kubient’s 2020 fiscal
year management representation letter to the independent auditor:
a. that the 2020 financial statements were fairly presented in conformity with
GAAP;
b. that he was not aware of any risks that the financial statements may be
materially misstated as a result of fraud; and
c. that he had not received any communications, nor did he have knowledge
of, any fraud, allegations of fraud, or suspected fraud that could have a
material effect on the financial statements.
91. Each of these statements was false when made because Roberts knew the $1.3
million in purported revenue from the KAI Deal had been improperly recognized as the beta test
on which that revenue was based never took place.
VI. Roberts Falsified Kubient’s Books, Records and/or Accounts.
92. Roberts knowingly circumvented a system of internal accounting controls and
knowingly falsified, or caused to be falsified, Kubient’s books, records, and/or accounts in
violation of Exchange Act Section 13(b)(5) [15 U.S.C. §78m(b)(5)] and Rule 13b2-1 thereunder
[17 C.F.R. §§ 240.13b2-1].
93. Roberts knowingly recorded and/or caused to be recorded on Kubient’s books
$1.3 million in revenue that was not in conformity with GAAP.
VII. Roberts Aided and Abetted Kubient’s Books and Records Violations.
A. Kubient Made False SEC Filings.

94. Kubient, through Roberts and others, filed current, quarterly, and/or annual
reports with the SEC that made material false statements and/or omitted material information

19
necessary to make the statements therein not misleading in violation of Exchange Act Section
13(a) [15 U.S.C. §78m(a)] and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R.
§§ 240.12b-20 and 240.13a-1].
95. Kubient’s Forms 10-Q for the second and third quarters of 2020 and the financial
statements included therein, and its Forms 8-K, filed on September 23, 2020, and November 13,
2020, that included earnings releases for those quarters, materially overstated the company’s
revenue by reporting $1.3 million in improper revenue from the KAI Deal.
96. Kubient’s 2020 Form 10-K and the financial statements contained therein
similarly materially overstated the company’s revenue and made material misrepresentations
about the KAI Deal.
97. In addition, Kubient’s Form 8-K filed on March 25, 2021, that included as an
exhibit its 2020 year-end earnings release, materially overstated the company’s revenue.
B. Kubient Maintained False Books and Records.

98. Kubient, through Roberts and others, failed to make and keep books, records, and
accounts, which, in reasonable detail, accurately and fairly reflected Kubient’s transactions in
violation of Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)].
99. Kubient’s books and records reflected $1.3 million in improper revenue.
100. Kubient, through Roberts and others, failed to document the circumstances and
conclusion surrounding Kubient scanning the wrong data, the subsequent communication and
resolution with the Customers, and the resulting impact on revenue recognition.
C.   Kubient Knowingly Circumvented Accounting Controls.

101. By directing, recording, and/or facilitating the improper recognition of $1.3
million in revenue during 2020, Kubient, through Roberts and others, knowingly circumvented

20
the company’s internal controls in violation of Exchange Act Section 13(b)(2)(B)(ii) [15 U.S.C.
§ 78m(b)(2)(B)(ii).].
102. In addition, Kubient did not have an adequate system of internal accounting
controls to ensure that revenue and assets were properly evaluated, supported, and recorded.
103. In addition to fabricating the supporting documentation for the improper KAI
Deal revenue before it was provided to the independent auditor, Roberts misrepresented and/or
omitted material information to the independent auditor about the fraudulent revenue, including
representing that he was not aware of any improper or fraudulent accounting practices at the
company and had made all relevant information available to the Independent Auditor.
D. Roberts Aided and Abetted the Violations of Kubient.

104. Roberts aided and abetted Kubient’s books and records violations by providing
substantial assistance through the conduct described above.
VIII. Roberts Falsely Certified that Kubient’s Periodic Filings Fairly Presented the
Financial Condition and Results of the Company.

105. Roberts signed Kubient’s third quarter 2020 Form 10-Q certification on
November 13, 2020, and Kubient’s 2020 Form 10-K certification on March 29, 2021, both of
which materially overstated Kubient’s revenue, and falsely certified that that those filings fairly
presented, in all material respects, the financial condition and results of operation of the company
in violation of Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14].
FIRST CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities – Violations of Securities Act Section 17(a)

106. The Commission realleges and incorporates by reference paragraphs 1 through
105, as though fully set forth herein.

21
107. By virtue of the foregoing, Defendant, directly or indirectly, in the offer or sale of
a security by the use of the means and instruments of transportation or communication in
interstate commerce or by use of the mails:
(a) employed a device, scheme, or artifice to defraud;
(b) obtained money or property by means of an untrue statement of a material
fact or by omitting to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading; and/or
(c) engaged in a transaction, practice, or course of business which operated or
would operate as a fraud or deceit upon the purchaser.
108. Defendant engaged in this conduct intentionally, knowingly, or with severe
recklessness.
109. Accordingly, Defendant, directly or indirectly, violated, and unless restrained and
enjoined will again violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Fraud – Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder

110. The Commission realleges and incorporates by reference paragraphs 1 through
109, as though fully set forth herein.
111. By engaging in the conduct described above, Defendant, directly or indirectly,
knowingly or recklessly, in connection with the purchase or sale of securities, directly or
indirectly, by use of the means or instrumentalities of interstate commerce, or the mails, or the
facilities of a national securities exchange:
(a) employed devices, schemes or artifices to defraud;

22
(b) made untrue statements of material facts or omitted to state material facts
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and
(c) engaged in acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon any person in connection with the
purchase or sale of any security.
112. Accordingly, Defendant, directly or indirectly, violated and unless enjoined will
again violate, Exchange Act Section 10(b) [15 U.S.C § 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5].
THIRD CLAIM FOR RELIEF
Fraud – Aiding and Abetting Kubient’s Violation of Exchange Act Section 10(b)
and Rule 10b-5(b) Thereunder

113. The Commission realleges and incorporates by reference paragraphs 1 through
112, as though fully set forth herein.
114. By virtue of the foregoing, Roberts provided knowing and substantial assistance to
Kubient, who, directly or indirectly, knowingly or recklessly, by use of the means or
instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities
exchange, in connection with the purchase or sale of a security: made untrue statements of
material fact or omitted to state material facts necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
115. Accordingly, Roberts aided and abetted and, unless restrained and enjoined, will
again aid and abet, the violations of Section 10(b) [15 U.S.C. § 78j(b)] of the Exchange Act and
Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)].

23
FOURTH CLAIM FOR RELIEF
 Material False Statements and/or Omissions of Material Fact to an Accountant –
Violation of Exchange Act Rule 13b2-2

116. The Commission realleges and incorporates by reference paragraphs 1 through
115, as though fully set forth herein.
117. By virtue of the foregoing, Defendant, directly or indirectly:
(a) Made or caused to be made a materially false or misleading statement to
an accountant or
(b) Omitted to state, or caused another person to omit to state, any material
fact necessary in order to make statements made, in light of the
circumstances under which such statements were made, not misleading, to
an accountant in connection with, among other things, a required audit,
review or examination of the issuer’s financial statements or the
preparation or filing of any document or report required to be filed with
the Commission.
118. Accordingly, Defendant violated, and unless restrained and enjoined will again
violate, Exchange Act Rule 13b2-2 [17 C.F.R. § 240.13b2-2].
FIFTH CLAIM FOR RELIEF
Falsified Books, Records or Accounts – Violations of Exchange Act Section 13(b)(5) and
Rule 13b2-1 Thereunder

119. The Commission realleges and incorporates by reference paragraphs 1 through
118, as though fully set forth herein.
120. By virtue of the foregoing, Defendant:
(a) knowingly circumvented or knowingly failed to implement a system of
internal accounting controls; and

24
(b) knowingly falsified, or caused to be falsified, Kubient’s books, records, or
accounts.
121. Accordingly, Defendant violated, and unless enjoined will again violate,
Exchange Act Section 13(b)(5) [15 U.S.C. §78m(b)(5)] of the Exchange Act and Rule 13b2-1
[17 C.F.R. §§ 240.13b2-1] thereunder.
SIXTH CLAIM FOR RELIEF
False Certifications of Annual and Quarterly Reports –
Violation of Exchange Act Rule 13a-14

122. The Commission realleges and incorporates by reference paragraphs 1 through
121, as though fully set forth herein.
123. By virtue of the foregoing, Defendant signed Kubient’s third quarter 2020 Form
10-Q certification on November 13, 2020, and Kubient’s 2020 Form 10-K certification pursuant
to Rule 13a-14 on March 29, 2021, both of which materially overstated Kubient’s revenue, and
falsely certified that those filings fairly presented, in all material respects, the financial condition
and results of operation of the company.
124. Accordingly, Defendant violated, and unless restrained and enjoined will again
violate, Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14].
SEVENTH CLAIM FOR RELIEF
False SEC Filings – Aiding and Abetting Kubient’s Violation of Section 13(a) of the
Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 Thereunder

125. The Commission realleges and incorporates by reference paragraphs 1 through
124, as though fully set forth herein.
126. By virtue of the foregoing, Defendant provided knowing and substantial
assistance to Kubient, which failed to file or filed current, quarterly, and annual reports with the

25
SEC which failed to include material information necessary to make the required statements, in
light of the circumstances under which they were made, not misleading.
127. Accordingly, Defendant aided and abetted and, unless restrained and enjoined,
will again aid and abet, Kubient’s violation of Exchange Act Section 13(a) [15 U.S.C. §78m(a)]
and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-1,
240.13a-11, and 240.13a-13].
EIGHTH CLAIM FOR RELIEF
False Books and Records – Aiding and Abetting Kubient’s Violation of Exchange Act
Section 13(b)(2)(A)

128. The Commission realleges and incorporates by reference paragraphs 1 through
127 as though fully set forth herein.
129. By virtue of the foregoing, Defendant provided knowing and substantial
assistance to Kubient, which failed to make and keep books, records, and accounts, which, in
reasonable detail, accurately and fairly reflected the transactions and dispositions of the assets of
the issuer.
130. Accordingly, Defendant aided and abetted and, unless restrained and enjoined,
will again aid and abet, Kubient’s violation of Exchange Act Section 13(b)(2)(A) [15 U.S.C.
§ 78m(b)(2)(A)].
NINTH CLAIM FOR RELIEF
Internal Accounting Controls – Aiding and Abetting Kubient’s Violation of
Exchange Act Section 13(b)(2)(B)(ii)

131. The Commission realleges and incorporates by reference paragraphs 1 through
130, as though fully set forth herein.
132. By virtue of the foregoing, Defendant provided knowing and substantial
assistance to Kubient, which failed to devise and maintain a system of internal accounting

26
controls sufficient to provide reasonable assurances that transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted accounting
principles or any other criteria applicable to such statements, and to maintain accountability for
assets.
133. Accordingly, Defendant aided and abetted and, unless restrained and enjoined,
will again aid and abet, Kubient’s violations of Exchange Act Section 13(b)(2)(B)(ii) [15 U.S.C.
§ 78m(b)(2)(B)(ii)].
RELIEF SOUGHT
WHEREFORE, the Commission respectfully requests that this Court:
I.
Find that Defendant committed the violations alleged in this Complaint;
II.
Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil
Procedure, permanently restraining and enjoining Defendant from violating, directly or
indirectly, the laws and rules alleged in this Complaint;
III.
Order Defendant to disgorge all ill-gotten gains received during the period of the
violative conduct, plus prejudgment interest thereon, pursuant to the Court’s equitable powers,
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], and Sections 21(d)(3), 21(d)(5), and
21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];
IV.
 Order Defendant to pay civil penalties pursuant to Section 20(d) of the Securities Act [15
U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)];

27
V.
Pursuant to the Court’s inherent equitable authority, Securities Act Section 20(e) [15
U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)], bar Defendant from
acting as an officer or director of a public company; and
VI.
Grant such other relief as this Court may deem just or appropriate.
JURY DEMAND
The Commission demands a trial by jury on all claims so triable.

Dated: September 16, 2024.

s/            Gregory            A.            Kasper
Gregory A. Kasper (NY 2735405; SDNY GK6596)
Jodanna L. Haskins (pro hac vice application
forthcoming)
Ian J. Kellogg (pro hac vice application
forthcoming)
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
1961 Stout Street, 17th Floor
Denver, Colorado 80294
(303) 844-1000
[email protected]
[email protected]
[email protected]

1 

GREGORY A. KASPER 
[email protected] 
JODANNA L. HASKINS (pro hac vice application forthcoming) 
[email protected] 
IAN J. KELLOGG (pro hac vice application forthcoming) 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
SECURITIES AND EXCHANGE COMMISSION, 
 

Plaintiff, 
 

- against – 
 
PAUL D. ROBERTS, 
 

Defendant. 

Case No. 24-cv-6990 

COMPLAINT FOR INJUNCTIVE 
AND OTHER RELIEF  

 
JURY TRIAL 
DEMANDED 

 

 
Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”), for its 

Complaint against defendant Paul D. Roberts (“Roberts” or “Defendant”), alleges as follows: 

SUMMARY 

1. Roberts, the former President, Interim Chief Executive Officer (“CEO”), and 

Chairman of Kubient Inc. (“Kubient”), engaged in a scheme to fraudulently inflate Kubient’s 

2020 revenue in advance of a planned initial public offering (“IPO”). Roberts touted the phony 

revenue and asserted that it demonstrated that Kubient’s flagship product, Kubient Artificial 

Intelligence (“KAI”), was successful. Based on the phony revenue and Roberts’s claims of 

KAI’s success, unsuspecting investors poured over $30 million into Kubient.  

2. In reality, Kubient’s use of KAI, a product that purportedly detects real-time fraud 

during digital advertising auctions, had not generated any meaningful revenue. Roberts 

fabricated fraud analyses that he claimed were prepared by KAI for two customers as part of a 

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2 

beta test despite Kubient not even obtaining the customers’ data to analyze. Roberts further 

claimed that Kubient received over $1.3 million in “revenue” for analyzing the customers’ data 

when, in fact, Kubient never performed the analyses to generate revenue. 

3. Roberts then lied to Kubient’s independent auditor concerning the revenue at 

issue and whether he was aware of any risks relating to the company’s revenue, allowing 

Kubient to continue to rely on its claims of the success of the KAI tests and phony revenue in 

offering materials and in its Form 10-K for 2020.  

NATURE OF THE PROCEEDINGS AND REQUESTED RELIEF 

4. The SEC brings this action pursuant to the authority conferred on it by Section 

20(b) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b)] and Section 21(d) of 

the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78u(d)]. The SEC seeks a 

permanent injunction against Roberts, enjoining him from engaging in the transactions, acts, 

practices, and courses of business alleged in this Complaint and from violating, directly or 

indirectly, the laws and rules alleged in this Complaint; disgorgement of all ill-gotten gains from 

the unlawful activity set forth in this Complaint, together with prejudgment interest; civil 

penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 

21(d) [15 U.S.C. § 78u(d)]; and an officer and director bar pursuant to the Court’s equitable 

authority, Securities Act Section 20(e) [15 U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) 

[15 U.S.C. § 78u(d)(2)].   

JURISDICTION AND VENUE 

5. This Court has subject matter jurisdiction pursuant to Securities Act Sections 

20(b), 20(d), 20(e), and 22(a) [15 U.S.C. Sections §§ 77t(b), 77t(d), 77t(e), and 77v(a)] and 

Exchange Act Sections 21(d), 21(e), and 27(a) [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

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3 

6. Roberts, directly or indirectly, made use of the means or instrumentalities of 

interstate commerce, or of the mails, or the facilities of a national securities exchange in 

connection with the acts, practices, transactions, and courses of business alleged in this 

Complaint.  

7. Venue lies in this Court pursuant to Sections 21(d) and 27 of the Exchange Act 

[15 U.S.C. § 78u(d) and 78aa]. Certain of the acts, practices, transactions, and courses of 

business alleged in this Complaint occurred within the Southern District of New York, Roberts 

transacted business in this District, and he worked for Kubient, which at all relevant times had its 

principal place of business within this judicial district in New York, New York.  

DEFENDANT 

8. Paul D. Roberts, age 47, is a resident of Melville, New York. He served as 

Kubient’s Chief Strategy Officer, President, and Chairman beginning on approximately May 15, 

2019. On October 31, 2020, Roberts became Kubient’s Interim CEO. On December 16, 2021, 

Roberts was made CEO. Roberts resigned as Chairman and CEO/President on September 22, 

2023, and November 2, 2023, respectively. 

RELATED ENTITY 

9. Kubient, Inc. is a Delaware corporation based in New York, New York. 

Kubient’s common stock is registered with the Commission under Section 12(b) of the Exchange 

Act. Kubient was quoted on the NASDAQ Capital Market under the ticker symbol “KBNT” 

beginning on August 12, 2020, until it was delisted on November 17, 2023. Unsolicited 

quotations for Kubient’s common stock are currently quoted on OTC Link.  

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4 

FACTUAL ALLEGATIONS 

I. Kubient and KAI 

10. During the relevant period, Kubient was a technology company that provided 

services to the digital advertising industry via a cloud-based software platform. 

11. According to Kubient, its flagship product KAI detected fraud when companies 

were buying or selling advertisements on digital platforms, such as Google. These purchases 

were typically made during real-time auctions for that digital ad space. As digital advertising is 

typically priced by how often the advertisement is viewed, KAI purported to detect when those 

views are not by humans but by software programs designed and implemented to inflate those 

views to increase the price of the advertising.  

II. Kubient’s IPO and Secondary Offering 
 

12.  Kubient engaged in two securities offerings—the IPO took place in August 2020 

and the second public offering took place in December 2020. 

A. IPO 

13. The offering materials for Kubient’s IPO included an S-1 registration statement 

and prospectus (“IPO Offering Materials”). The final IPO Offering Materials were filed and 

made effective on August 11, 2020. 

14. Kubient raised approximately $12.5 million as a result of its IPO. 

B. Secondary Offering 

15. Beginning on December 22, 2020, approximately four months after its IPO, 

Kubient conducted a secondary offering of its common stock. 

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5 

16. The offering materials for Kubient’s secondary offering included an S-1 

registration statement and prospectus (the “Secondary Offering Materials”). The Secondary 

Offering Materials were filed on December 21, 2020, and made effective on December 22, 2020. 

17. Kubient raised approximately $20.7 million as a result of its secondary offering. 

III. Roberts Engaged in Deceptive Acts and Practices to Falsely Inflate KAI Revenue, 
Resulting in Kubient Recognizing Improper Revenue. 
 

18. Roberts engaged in deceptive acts and practices to falsely inflate KAI revenue by 

instructing Kubient employees to fabricate KAI fraud analysis reports; instructing Kubient’s 

former Chief Financial Officer (“CFO”) to send the fabricated fraud analysis reports to Kubient’s 

independent auditor; and causing Kubient to record $1.3 million in revenue despite knowing the 

performance obligations associated with that revenue had not been satisfied.   

19. Prior to the first quarter of 2020, Kubient had not generated any meaningful 

revenue from KAI. By late 2019, running short of funds and Kubient’s efforts to attract 

investment from private equity funds failing, Kubient planned to offer shares to the public 

through an IPO. For the IPO to be as successful as possible, Kubient needed to show that KAI 

worked effectively in detecting fraud and that there was interest in and revenue from the product.  

20. In or about the fourth quarter of 2019, Kubient entered into transactions with two 

customers (collectively, the “Customers”) whereby (1) Kubient would provide a KAI “beta test” 

fraud analysis to each of the Customers for a total of $1.3 million (the “KAI Deal”), and (2) the 

Customers would sell data to Kubient for approximately the same dollar amount. 

A. Kubient Did Not Perform Under the KAI Deal and Roberts Engaged in Deceptive 
Conduct to Hide Kubient’s Failure to Perform. 

 
21. The contract for the KAI Deal provided that the Customers would transfer data to 

Kubient, Kubient would scan that data with KAI, and Kubient would then provide KAI fraud 

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6 

analysis reports (the “KAI Reports”) to the Customers. However, none of these contractual 

obligations were performed because the Customers never provided Kubient with data for a KAI 

analysis.  

22. In the first quarter of 2020, Kubient recorded $1.3 million in revenue for the KAI 

Deal, constituting nearly all of Kubient’s revenue that quarter, and approximately 95% of the 

company’s revenue at the time of its IPO in August 2020. Because the Customers never provided 

any data for Kubient to scan, and Kubient had not in fact performed the work contracted for, 

revenue should not have been recognized. 

23. Roberts knew or was reckless in not knowing, and should have known, that none 

of the performance obligations set forth in the contract for the KAI Deal were satisfied. 

24. During the first quarter of 2020, the CFO asked Roberts for the KAI Reports to 

provide to the independent auditor to support the revenue.  

25. In response, Roberts created fictitious KAI reports to support Kubient’s revenue. 

To do so, he first instructed a Kubient employee (“Employee 1”) to create two electronic 

folders—named for the Customers—under the pretext of creating a “sample.” Roberts did not 

provide Employee 1 with any Customer data but told Employee 1 to populate the folders with 

“our own data.” Employee 1 did so, inserting existing data from other Kubient customers into the 

folders. 

26. Roberts instructed another Kubient employee (“Employee 2”) to create “sample” 

KAI reports, indicating that the reports would be shown to bankers during the company’s 

upcoming IPO road show.  

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7 

27. Roberts then provided Employee 2 with the information he wanted the employee 

to plug into the “sample” KAI reports, including the amount of fraud KAI had purportedly 

detected. 

28. Employee 2 asked Roberts for the data to be analyzed by KAI. In response, 

Roberts told Employee 2 that there was no actual data to be analyzed and reiterated that these 

were simply “sample” reports.  

29. Employee 2 created the “sample” KAI Reports, as directed by Roberts, and sent 

them to Roberts on March 24, 2020. 

30. On March 25, 2020, the day after Employee 2 sent Roberts the KAI Reports they 

had prepared, Roberts emailed the reports to the CFO to provide to the independent auditor as 

support for the $1.3 million in revenue from the KAI Deal.  

31. In reviewing the KAI Reports, the CFO noticed the quantity of data that had been 

allegedly analyzed differed from the quantity of data for which the Customers had been invoiced 

the previous quarter. Instead of inquiring further about the discrepancy, the CFO asked Roberts if 

the CFO should change the numbers reflecting the quantity of data analyzed in the KAI Reports 

to match the numbers in the invoices, to which Roberts replied “yes.”  

32. As agreed to with Roberts, the CFO then changed the KAI Reports before 

emailing these reports, in addition to the underlying KAI Deal contract and invoices, to the 

independent auditor, copying Roberts.  

B. A Kubient Employee Raised Questions about the KAI Deal Revenue, and Roberts 
Again Engaged in Deceptive Conduct to Conceal the Improperly Recognized 
Revenue. 

 
33. On December 22, 2020, a high-level Kubient employee who co-developed KAI 

(“Employee 3”) discovered that the data purportedly provided by the Customers for the KAI 

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8 

Deal did not originate from the Customers. After opening the electronic folders containing the 

data that was supposed to be analyzed in connection with the KAI Deal, Employee 3 discovered 

that the data originated from other Kubient customers. 

34. That same day, Employee 3 reported his findings to Kubient’s Audit Committee 

Chair (“AC Chair”). During Employee 3’s conversation with the AC Chair, Employee 3 advised 

the AC Chair that Kubient had not scanned any of the Customers’ data, that the folders 

purportedly holding the Customers’ data contained data from other Kubient customers, and 

questioned whether Employee 3’s discovery could be the result of fraud.  

35. The AC Chair then discussed the issue with Roberts as well as the CFO and 

Kubient’s outside securities counsel.  

36. As a result, Roberts called a representative of the Customers on December 23, 

2020. 

37. On December 28, 2020, after being asked by the CFO for an update on “last 

week’s fiasco,” Roberts told the CFO he had a “solution in place” and would send an email 

shortly.  

38. On December 29, 2020, Roberts sent an email to the Customers (copying the 

CFO) stating, in relevant part: 

During a recent internal review, we discovered that the data used 
during [our fraud prevention] test may not have originated from 
[you]. I apologize for this and would like to offer a solution that 
satisfies you and your team. Kubient can retest your data using KAI 
at no cost as per the agreement terms or offer any suitable solution 
you can provide. Please let me know how you would like to proceed. 

 
39. Later that day, the Customers responded as follows: 

 
After connecting with the team internally, everyone agreed that 
during those 90-days we received a ton of value from your team. We 

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9 

all appreciate the offer to rescan our traffic, however we are very 
satisfied with west [sic] we received . . . . 
 

C. Revenue is Improperly Recognized. 
 

40. In the first quarter of 2020, Kubient recognized $1.3 million in revenue based on 

the KAI Deal. That revenue was reflected in financial statements included in Kubient’s second 

and third quarter 2020 Forms 10-Q, 2020 Form 10-K, and IPO and Secondary Offering 

Materials. The improper revenue was also reported in Kubient’s earnings releases and associated 

Forms 8-K, and earnings calls for the second and third quarters of 2020 as well as year-end 2020. 

41. The $1.3 million in revenue should not have been recognized because the 

performance obligations for the KAI Deal were not performed in accordance with the applicable 

accounting standard for revenue recognition: Financial Accounting Standards Board (“FASB”) 

Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers 

(“ASC 606”).  As such, the recognized revenue was not in conformity with Generally Accepted 

Accounting Principles (“GAAP”). 

42. In a memo provided to the independent auditor in May 2020, justifying Kubient’s 

accounting treatment of the revenue from the KAI Deal, the CFO, relying on false information 

provided by Roberts, confirmed Kubient received the data from the Customers. 

43. Roberts knew or was reckless in not knowing, and should have known, that the 

revenue should not have been recognized. 

44. The revenue recorded from the KAI Deal was material as it constituted nearly all 

of Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue 

at the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual 

revenue. Moreover, it is likely the IPO would not have been underwritten had the underwriter 

known about the fraudulent KAI Deal revenue. 

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10 

IV. False and Misleading Statements in Offering Materials and Filings. 
 
A. Kubient, Aided and Abetted by Roberts, Made False and Misleading Statements 

Prior to Kubient’s IPO. 
 

45. After fraudulently recognizing revenue from the KAI Deal in the first quarter of 

2020, Kubient spent the next several months preparing for its IPO.  

46. At the time of Kubient’s IPO in August 2020, Roberts served as Kubient’s Chief 

Strategy Officer, President, and Chairman. 

47. In those roles, Roberts reviewed, approved, and, at least in part, drafted the IPO 

Offering Materials filed on August 11, 2020, which contained numerous false statements. 

48. The IPO Offering Materials highlighted Kubient’s $1.3 million successful sale 

and “beta test” of its KAI product to the Customers. 

49. Kubient’s IPO Offering Materials, filed on August 11, 2020, provided, in relevant 

part: 

During the quarter ended March 31, 2020, we allowed two large 
enterprise clients to beta test KAI in a live isolated environment. 
Kubient was able to successfully ingest hundreds of millions of rows 
of data in real-time and provide our clients the ability to prevent the 
purchase of non-human or fraudulent advertising traffic. The results 
from the two beta clients indicated that KAI was identifying and 
preventing approximately 300% more digital ad fraud than the 
clients’ current partners. The large volume of data ingested helped 
to improve our proprietary algorithms including the supervised and 
unsupervised version. This was invaluable as it provided us an 
opportunity to stress test our ability to handle large scale, concurrent 
input of data into our system which is then analyzed using our 
patent-pending proprietary machine learning technology. . . . 

 
50. Kubient made similar false statements in other sections of its IPO Offering 

Materials. For example, in a section addressing net revenues Kubient stated: 

For the three months ended March 31, 2020, net revenues increased 
by $1,325,107, or 2,333%, to $1,381,913 from $56,806 for the three 
months ended March 31, 2019. This increase was primarily due to 

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11 

approximately $1,300,000 of revenue generated in connection with 
beta testing of KAI, our fraud detection service, which commenced 
during the 2020 period . . . . 

 
51. A reasonable investor would have understood from these statements that Kubient  

had successfully tested KAI using the Customers’ data and that the successful beta test yielded 

$1.3 million in revenue for Kubient. 

52. The statements in the IPO Offering Materials identified above were false and 

misleading because the Customers never provided any data to Kubient, Kubient never scanned 

any of the Customers’ data through KAI, and the $1.3 million in purported revenue was 

improperly recognized. 

53. The statements in the IPO Offering Materials identified above were false and 

misleading when made and Roberts knew or was reckless in not knowing, and should have 

known, that the statements were false and misleading because he was aware that no data had 

been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis 

reports were fake, and that the $1.3 million in purported revenue was improperly recognized. 

54. The false and misleading statements in the IPO Offering Materials identified 

above were material to a reasonable investor because the KAI Deal revenue constituted nearly all 

of Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue 

at the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual 

revenue. Moreover, it is likely the IPO would not have been underwritten had the underwriter 

known about the fraudulent KAI Deal revenue. 

55. As a result of its IPO, Kubient raised approximately $12.5 million from investors. 

56. Roberts aided and abetted Kubient’s false and misleading statements violations by 

providing substantial assistance through the conduct described above. 

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12 

B. Kubient, Aided and Abetted by Roberts, Made False and Misleading Statements in 
Kubient’s Second Quarter Report and Form 8-K Filing After the Kubient IPO. 

 
57. Following its IPO, Kubient filed a quarterly report for the second quarter of 2020, 

on September 24, 2020, that fraudulently reported the $1.3 million from the KAI Deal as revenue 

in the financial statements.  

58. In addition, Kubient’s second quarter report falsely stated: 

During the . . . [foregoing six-month period], the Company 
recognized revenue in connection with contracts to scan a 
customers’ [sic] first-party anonymized data with KAI. Upon 
completion of the scan, the Company delivered a report to the 
customer, which is the point in time the Company satisfied the 
performance obligation . . . During the . . . [foregoing periods], the 
Company recognized aggregate revenue of $0 [sic] and $1,300,338, 
respectively, in connection with the contracts. 
 

59. The second quarter report also falsely stated: 

In addition, during the [relevant period], we allowed two clients to 
beta test KAI, our fraud prevention technology powered by machine 
learning. This testing was invaluable as it provided us an 
opportunity to stress test our ability to handle large scale, concurrent 
input of data into our system which is then analyzed using our 
patent-pending proprietary machine learning technology. We were 
able to successfully ingest hundreds of millions of rows of data in 
real-time and provide our clients the ability to prevent the purchase 
of non-human or fraudulent advertising traffic, which will lead to 
additional improvements to our technology. While KAI was 
monetized in the first quarter during beta testing, it was made 
available as a stand-alone enterprise in the third quarter of 2020. 
 

60. The second quarter report also falsely stated: 

For the six months ended June 30, 2020, net revenues increased by 
$1,367,494, or 1,291%, to $1,473,450 from $105,956 for the six 
months ended June 30, 2019. The increase was primarily due to 
approximately $1,300,000 of revenue generated in connection with 
beta testing of KAI, our fraud detection service[.] 
 

61. Kubient also fraudulently reported the $1.3 million in revenue from the KAI Deal 

in an earnings release included with its Form 8-K filing on September 23, 2020. 

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13 

62. A reasonable investor would have understood from these financial statements and 

Form 8-K that KAI yielded $1.3 million in revenue for Kubient. 

63. The statements in the second quarter report and Form 8-K were false and 

misleading because the Customers never provided any data to Kubient, Kubient never scanned 

any of the Customers’ data through KAI, and the $1.3 million in purported revenue was 

improperly recognized.  

64. The statements in the second quarter report and the Form 8-K were false and 

misleading when made and Roberts knew or was reckless in not knowing, and should have 

known, that these statements were false and misleading because he was aware that no data had 

been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis 

reports were fake, and that the $1.3 million in purported revenue was improperly recognized. 

65. The false and misleading statements in the second quarter report and the Form 8-

K were material to a reasonable investor because the KAI Deal revenue constituted nearly all of 

Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue at 

the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual 

revenue. 

66. Roberts aided and abetted Kubient’s false and misleading statements violations by 

providing substantial assistance through the conduct described above. 

C. Kubient and Roberts Made False and Misleading Statements in Kubient’s Third 
Quarter Report and Form 8-K Filing After the Kubient IPO. 

 
67. On October 31, 2020, Roberts was appointed Interim CEO of Kubient.  

68. In that role, Roberts signed the quarterly report for the third quarter of 2020, 

which Kubient filed on November 13, 2020. As a signer of the filings, and Interim CEO, Roberts 

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14 

had the ultimate authority over the statements, including their content and whether and how to 

communicate them. 

69. The third quarter report fraudulently reported the $1.3 million from the KAI Deal 

as revenue in the financial statements.  

70. In addition, Kubient’s third quarter report  falsely stated: 

During the . . . [foregoing nine-month period], the Company 
recognized revenue in connection with contracts to scan a 
customers’ [sic] first-party anonymized data with KAI. Upon 
completion of the scan, the Company delivered a report to the 
customer, which is the point in time the Company satisfied the 
performance obligation . . . . During the . . . [foregoing periods], the 
Company recognized aggregate revenue of $0 [sic] and $1,300,338, 
respectively, in connection with the contracts. 
 

71. The third quarter report also falsely stated: 

In addition, during the [relevant period], we allowed two clients to 
beta test KAI, our fraud prevention technology powered by machine 
learning. This testing was invaluable as it provided us an 
opportunity to stress test our ability to handle large scale, concurrent 
input of data into our system which is then analyzed using our 
patent-pending proprietary machine learning technology. We were 
able to successfully ingest hundreds of millions of rows of data in 
real-time and provide our clients the ability to prevent the purchase 
of non-human or fraudulent advertising traffic, which will lead to 
additional improvements to our technology. While KAI was 
monetized in the first quarter during beta testing, it was made 
available as a stand-alone enterprise in the third quarter of 2020. 
 

72. The third quarter report similarly falsely stated: 

For the nine months ended September 30, 2020, net revenues 
increased by $1,592,023, or 984%, to $1,753,851 from $161,828 
for the nine months ended September 30, 2019. The increase was 
primarily due to approximately $1,300,000 of revenue generated in 
connection with beta testing of KAI, our fraud detection service, 
which commenced during the 2020 period[.] 
 

73. Kubient also fraudulently reported the $1.3 million in revenue from the KAI Deal 

in an earnings release included with its Form 8-K filing on November 13, 2020. 

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15 

74. A reasonable investor would have understood from the third quarter report and 

Form 8-K that KAI yielded $1.3 million in revenue for Kubient. 

75. The statements in the third quarter report and Form 8-K were false and misleading 

because the Customers never provided any data to Kubient, Kubient never scanned any of the 

Customers’ data through KAI, and the $1.3 million in purported revenue was improperly 

recognized.  

76. The statements in the third quarter report and the Form 8-K were false and 

misleading when made and Roberts knew or was reckless in not knowing, and should have 

known, that these statements were false and misleading because he was aware that no data had 

been provided by the Customers, that no data had been scanned by KAI, that the fraud analysis 

reports were fake, and that the $1.3 million in purported revenue was improperly recognized. 

77. The false and misleading statements in the third quarter report and the Form 8-K 

were material to a reasonable investor because the KAI Deal revenue constituted nearly all of 

Kubient’s revenue for the first quarter of 2020, approximately 95% of the company’s revenue at 

the time of its IPO in August 2020, and approximately 45% of the company’s 2020 annual 

revenue. 

D. Kubient and Roberts Made False and Misleading Statements in Connection with 
Kubient’s Secondary Offering. 

 
78. During the secondary offering, following Roberts’ appointment as Interim CEO, 

Kubient and Roberts continued to tout the success of the KAI beta test and improperly recognize 

$1.3 million from the KAI Deal in financial statements and offering materials. 

79. Kubient’s Secondary Offering Materials and 2020 Form 10-K were signed by 

Roberts, who stated that the $1.3 million in revenue reported in 2020 had been generated from a 

highly successful beta test of KAI. As a signer of the filings, and Interim CEO, Roberts had the 

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16 

ultimate authority over the statements, including their content and whether and how to 

communicate them. 

80. These statements were false and misleading because a beta test of KAI never 

occurred, nor could it have occurred because the Customers never provided data to Kubient to 

scan through KAI, and the $1.3 million in purported revenue was improperly recognized. 

81. The statements in the Secondary Offering Materials and 2020 Form 10-K were 

false and misleading when made, and Roberts knew or was reckless in not knowing, and should 

have known, that these statements were false and misleading because he knew a beta test of KAI 

never occurred, nor could it have occurred because the Customers never provided data to 

Kubient to scan through KAI, and the $1.3 million in purported revenue was improperly 

recognized. 

82. These false and misleading statements were material to investors because a 

reasonable investor would have understood from these statements in Kubient’s Secondary 

Offering Materials and 2020 Form 10-K that Kubient had successfully tested KAI with the 

Customers, and that the successful beta test yielded $1.3 million in revenue for Kubient.  

E. Roberts Made, or Aided and Abetted Kubient’s Making of, the Statements 
Identified Above, and Kubient and Roberts Obtained Money or a Financial Benefit 
from the False and Misleading Statements. 
 
83. For each of the statements identified above in Section IV(A) and (B), Roberts 

aided and abetted Kubient’s false and misleading statements violations of Exchange Act Section 

10(b) and Rule 10b-5(b) thereunder by providing substantial assistance through the conduct 

described above. 

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17 

84. For each of the statements identified above in Section IV(C) and (D), Roberts 

reviewed, approved, and, at least in part, drafted, and/or signed the documents containing the 

statements, and as the Interim CEO and Chairman had ultimate authority over the documents. 

85. Kubient and Roberts, directly or indirectly, each obtained money or a financial 

benefit from the statements identified above. As described above, Kubient raised approximately 

$33 million from its IPO and secondary offering. In addition, Kubient obtained a financial 

benefit during the relevant period from issuing stock and warrants at prices that were artificially 

inflated from the fraudulent conduct.  

86. Further, Kubient awarded Roberts cash bonuses which Kubient described as 

follows: “(i) a $250,000 cash bonus related to Mr. Robert’s [sic] efforts in connection with the 

Company’s IPO, (ii) a $250,000 cash bonus in related to Mr. Robert’s [sic] efforts in connection 

with the Company’s follow-on offering, and (iii) a $90,000 contractual annual performance 

bonus.” Kubient awarded the $90,000 bonus “in connection with [his] performance during 

2020[.]” 

V. Roberts Made Misrepresentations to Kubient’s Auditors. 
 
87. Kubient hired an independent auditor to conduct an audit for Kubient’s 2020 

fiscal year. 

88. In connection with that audit, Roberts made, or caused to be made, materially 

false or misleading statements and/or omissions of material facts to the independent auditor in 

violation of Exchange Act Rule 13b2-2 [17 C.F.R. § 240.13b2-2]. 

89. On March 25, 2020, Roberts caused materially false statements to be made to the 

independent auditor in connection with Kubient’s IPO by causing fabricated KAI Reports to be 

provided to the independent auditor to support the fraudulent revenue reported throughout 2020. 

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18 

90. Further, on March 29, 2021, Roberts falsely represented in Kubient’s 2020 fiscal 

year management representation letter to the independent auditor: 

a. that the 2020 financial statements were fairly presented in conformity with 

GAAP;  

b. that he was not aware of any risks that the financial statements may be 

materially misstated as a result of fraud; and  

c. that he had not received any communications, nor did he have knowledge 

of, any fraud, allegations of fraud, or suspected fraud that could have a 

material effect on the financial statements. 

91. Each of these statements was false when made because Roberts knew the $1.3 

million in purported revenue from the KAI Deal had been improperly recognized as the beta test 

on which that revenue was based never took place. 

VI. Roberts Falsified Kubient’s Books, Records and/or Accounts. 

92. Roberts knowingly circumvented a system of internal accounting controls and 

knowingly falsified, or caused to be falsified, Kubient’s books, records, and/or accounts in 

violation of Exchange Act Section 13(b)(5) [15 U.S.C. §78m(b)(5)] and Rule 13b2-1 thereunder 

[17 C.F.R. §§ 240.13b2-1]. 

93. Roberts knowingly recorded and/or caused to be recorded on Kubient’s books 

$1.3 million in revenue that was not in conformity with GAAP. 

VII. Roberts Aided and Abetted Kubient’s Books and Records Violations. 

A. Kubient Made False SEC Filings. 
 
94. Kubient, through Roberts and others, filed current, quarterly, and/or annual 

reports with the SEC that made material false statements and/or omitted material information 

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19 

necessary to make the statements therein not misleading in violation of Exchange Act Section 

13(a) [15 U.S.C. §78m(a)] and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. 

§§ 240.12b-20 and 240.13a-1]. 

95. Kubient’s Forms 10-Q for the second and third quarters of 2020 and the financial 

statements included therein, and its Forms 8-K, filed on September 23, 2020, and November 13, 

2020, that included earnings releases for those quarters, materially overstated the company’s 

revenue by reporting $1.3 million in improper revenue from the KAI Deal.  

96. Kubient’s 2020 Form 10-K and the financial statements contained therein 

similarly materially overstated the company’s revenue and made material misrepresentations 

about the KAI Deal.  

97. In addition, Kubient’s Form 8-K filed on March 25, 2021, that included as an 

exhibit its 2020 year-end earnings release, materially overstated the company’s revenue.  

B. Kubient Maintained False Books and Records.  
 
98. Kubient, through Roberts and others, failed to make and keep books, records, and 

accounts, which, in reasonable detail, accurately and fairly reflected Kubient’s transactions in 

violation of Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)]. 

99. Kubient’s books and records reflected $1.3 million in improper revenue. 

100. Kubient, through Roberts and others, failed to document the circumstances and 

conclusion surrounding Kubient scanning the wrong data, the subsequent communication and 

resolution with the Customers, and the resulting impact on revenue recognition. 

C.   Kubient Knowingly Circumvented Accounting Controls. 
 
101. By directing, recording, and/or facilitating the improper recognition of $1.3 

million in revenue during 2020, Kubient, through Roberts and others, knowingly circumvented 

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20 

the company’s internal controls in violation of Exchange Act Section 13(b)(2)(B)(ii) [15 U.S.C. 

§ 78m(b)(2)(B)(ii).].  

102. In addition, Kubient did not have an adequate system of internal accounting 

controls to ensure that revenue and assets were properly evaluated, supported, and recorded. 

103. In addition to fabricating the supporting documentation for the improper KAI 

Deal revenue before it was provided to the independent auditor, Roberts misrepresented and/or 

omitted material information to the independent auditor about the fraudulent revenue, including 

representing that he was not aware of any improper or fraudulent accounting practices at the 

company and had made all relevant information available to the Independent Auditor. 

D. Roberts Aided and Abetted the Violations of Kubient. 
 
104. Roberts aided and abetted Kubient’s books and records violations by providing 

substantial assistance through the conduct described above. 

VIII. Roberts Falsely Certified that Kubient’s Periodic Filings Fairly Presented the 
Financial Condition and Results of the Company.  

 
105. Roberts signed Kubient’s third quarter 2020 Form 10-Q certification on 

November 13, 2020, and Kubient’s 2020 Form 10-K certification on March 29, 2021, both of 

which materially overstated Kubient’s revenue, and falsely certified that that those filings fairly 

presented, in all material respects, the financial condition and results of operation of the company 

in violation of Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14]. 

FIRST CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities – Violations of Securities Act Section 17(a) 

 
106. The Commission realleges and incorporates by reference paragraphs 1 through 

105, as though fully set forth herein. 

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21 

107. By virtue of the foregoing, Defendant, directly or indirectly, in the offer or sale of 

a security by the use of the means and instruments of transportation or communication in 

interstate commerce or by use of the mails: 

(a) employed a device, scheme, or artifice to defraud;  

(b) obtained money or property by means of an untrue statement of a material 

fact or by omitting to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were 

made, not misleading; and/or  

(c) engaged in a transaction, practice, or course of business which operated or 

would operate as a fraud or deceit upon the purchaser. 

108. Defendant engaged in this conduct intentionally, knowingly, or with severe 

recklessness.  

109. Accordingly, Defendant, directly or indirectly, violated, and unless restrained and 

enjoined will again violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Fraud – Violation of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

 
110. The Commission realleges and incorporates by reference paragraphs 1 through 

109, as though fully set forth herein. 

111. By engaging in the conduct described above, Defendant, directly or indirectly, 

knowingly or recklessly, in connection with the purchase or sale of securities, directly or 

indirectly, by use of the means or instrumentalities of interstate commerce, or the mails, or the 

facilities of a national securities exchange:  

(a) employed devices, schemes or artifices to defraud;  

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22 

(b) made untrue statements of material facts or omitted to state material facts 

necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and  

(c) engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon any person in connection with the 

purchase or sale of any security.  

112. Accordingly, Defendant, directly or indirectly, violated and unless enjoined will 

again violate, Exchange Act Section 10(b) [15 U.S.C § 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5].  

THIRD CLAIM FOR RELIEF 
Fraud – Aiding and Abetting Kubient’s Violation of Exchange Act Section 10(b) 

and Rule 10b-5(b) Thereunder 
 

113. The Commission realleges and incorporates by reference paragraphs 1 through 

112, as though fully set forth herein. 

114. By virtue of the foregoing, Roberts provided knowing and substantial assistance to 

Kubient, who, directly or indirectly, knowingly or recklessly, by use of the means or 

instrumentalities of interstate commerce, or of the mails, or of a facility of a national securities 

exchange, in connection with the purchase or sale of a security: made untrue statements of 

material fact or omitted to state material facts necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading.  

115. Accordingly, Roberts aided and abetted and, unless restrained and enjoined, will 

again aid and abet, the violations of Section 10(b) [15 U.S.C. § 78j(b)] of the Exchange Act and 

Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]. 

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23 

FOURTH CLAIM FOR RELIEF 
 Material False Statements and/or Omissions of Material Fact to an Accountant –  

Violation of Exchange Act Rule 13b2-2 
 
116. The Commission realleges and incorporates by reference paragraphs 1 through 

115, as though fully set forth herein. 

117. By virtue of the foregoing, Defendant, directly or indirectly: 

(a) Made or caused to be made a materially false or misleading statement to 

an accountant or 

(b) Omitted to state, or caused another person to omit to state, any material 

fact necessary in order to make statements made, in light of the 

circumstances under which such statements were made, not misleading, to 

an accountant in connection with, among other things, a required audit, 

review or examination of the issuer’s financial statements or the 

preparation or filing of any document or report required to be filed with 

the Commission. 

118. Accordingly, Defendant violated, and unless restrained and enjoined will again 

violate, Exchange Act Rule 13b2-2 [17 C.F.R. § 240.13b2-2]. 

FIFTH CLAIM FOR RELIEF 
Falsified Books, Records or Accounts – Violations of Exchange Act Section 13(b)(5) and 

Rule 13b2-1 Thereunder 
 
119. The Commission realleges and incorporates by reference paragraphs 1 through 

118, as though fully set forth herein. 

120. By virtue of the foregoing, Defendant: 

(a) knowingly circumvented or knowingly failed to implement a system of 

internal accounting controls; and 

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24 

(b) knowingly falsified, or caused to be falsified, Kubient’s books, records, or 

accounts. 

121. Accordingly, Defendant violated, and unless enjoined will again violate, 

Exchange Act Section 13(b)(5) [15 U.S.C. §78m(b)(5)] of the Exchange Act and Rule 13b2-1 

[17 C.F.R. §§ 240.13b2-1] thereunder. 

SIXTH CLAIM FOR RELIEF 
False Certifications of Annual and Quarterly Reports –  

Violation of Exchange Act Rule 13a-14 
 
122. The Commission realleges and incorporates by reference paragraphs 1 through 

121, as though fully set forth herein. 

123. By virtue of the foregoing, Defendant signed Kubient’s third quarter 2020 Form 

10-Q certification on November 13, 2020, and Kubient’s 2020 Form 10-K certification pursuant 

to Rule 13a-14 on March 29, 2021, both of which materially overstated Kubient’s revenue, and 

falsely certified that those filings fairly presented, in all material respects, the financial condition 

and results of operation of the company. 

124. Accordingly, Defendant violated, and unless restrained and enjoined will again 

violate, Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14]. 

SEVENTH CLAIM FOR RELIEF 
False SEC Filings – Aiding and Abetting Kubient’s Violation of Section 13(a) of the 

Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 Thereunder 
 
125. The Commission realleges and incorporates by reference paragraphs 1 through 

124, as though fully set forth herein. 

126. By virtue of the foregoing, Defendant provided knowing and substantial 

assistance to Kubient, which failed to file or filed current, quarterly, and annual reports with the 

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25 

SEC which failed to include material information necessary to make the required statements, in 

light of the circumstances under which they were made, not misleading. 

127. Accordingly, Defendant aided and abetted and, unless restrained and enjoined, 

will again aid and abet, Kubient’s violation of Exchange Act Section 13(a) [15 U.S.C. §78m(a)] 

and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-1, 

240.13a-11, and 240.13a-13]. 

EIGHTH CLAIM FOR RELIEF 
False Books and Records – Aiding and Abetting Kubient’s Violation of Exchange Act 

Section 13(b)(2)(A) 
 
128. The Commission realleges and incorporates by reference paragraphs 1 through 

127 as though fully set forth herein. 

129. By virtue of the foregoing, Defendant provided knowing and substantial 

assistance to Kubient, which failed to make and keep books, records, and accounts, which, in 

reasonable detail, accurately and fairly reflected the transactions and dispositions of the assets of 

the issuer. 

130. Accordingly, Defendant aided and abetted and, unless restrained and enjoined, 

will again aid and abet, Kubient’s violation of Exchange Act Section 13(b)(2)(A) [15 U.S.C. 

§ 78m(b)(2)(A)]. 

NINTH CLAIM FOR RELIEF 
Internal Accounting Controls – Aiding and Abetting Kubient’s Violation of  

Exchange Act Section 13(b)(2)(B)(ii) 
 

131. The Commission realleges and incorporates by reference paragraphs 1 through 

130, as though fully set forth herein. 

132. By virtue of the foregoing, Defendant provided knowing and substantial 

assistance to Kubient, which failed to devise and maintain a system of internal accounting 

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26 

controls sufficient to provide reasonable assurances that transactions are recorded as necessary to 

permit preparation of financial statements in conformity with generally accepted accounting 

principles or any other criteria applicable to such statements, and to maintain accountability for 

assets. 

133. Accordingly, Defendant aided and abetted and, unless restrained and enjoined, 

will again aid and abet, Kubient’s violations of Exchange Act Section 13(b)(2)(B)(ii) [15 U.S.C. 

§ 78m(b)(2)(B)(ii)]. 

RELIEF SOUGHT 

WHEREFORE, the Commission respectfully requests that this Court: 

I. 

Find that Defendant committed the violations alleged in this Complaint; 

II. 

Enter an Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil 

Procedure, permanently restraining and enjoining Defendant from violating, directly or 

indirectly, the laws and rules alleged in this Complaint; 

III. 

Order Defendant to disgorge all ill-gotten gains received during the period of the 

violative conduct, plus prejudgment interest thereon, pursuant to the Court’s equitable powers, 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], and Sections 21(d)(3), 21(d)(5), and 

21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

IV. 

 Order Defendant to pay civil penalties pursuant to Section 20(d) of the Securities Act [15 

U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)];  

Case 1:24-cv-06990     Document 1     Filed 09/16/24     Page 26 of 27



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V. 

Pursuant to the Court’s inherent equitable authority, Securities Act Section 20(e) [15 

U.S.C. § 77t(e)] and Exchange Act Section 21(d)(2) [15 U.S.C. § 78u(d)(2)], bar Defendant from 

acting as an officer or director of a public company; and 

VI. 

Grant such other relief as this Court may deem just or appropriate. 

JURY DEMAND 

The Commission demands a trial by jury on all claims so triable. 
 
Dated: September 16, 2024.  
 

s/ Gregory A. Kasper      
Gregory A. Kasper (NY 2735405; SDNY GK6596) 
Jodanna L. Haskins (pro hac vice application 
forthcoming) 
Ian J. Kellogg (pro hac vice application 
forthcoming) 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
1961 Stout Street, 17th Floor 
Denver, Colorado 80294 
(303) 844-1000 
[email protected] 
[email protected] 
[email protected] 

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