SEC v. Akazoo S.A., No. 1:20-cv-08101, Southern District of New York (Oct. 23, 2020) — Judgment
raw: In re Akazoo S.A. Securities Litigation
In re Akazoo S.A. Securities Litigation, No. 1:20-cv-08101 (E.D.N.Y. Oct. 23, 2020)
Akazoo S.A. committed securities fraud by misleading investors with false financial statements to raise over $100 million, agreeing to a $38.8 million disgorgement deemed satisfied via a $35 million private settlement and coordination on additional recoveries, without admitting or denying the allegations.
The SEC charged Akazoo S.A. with securities fraud for issuing false and misleading financial statements to inflate its stock price and raise over $100 million from investors. The court entered an agreed final judgment requiring Akazoo to disgorge $38.8 million in ill-gotten gains, which will be deemed satisfied by its $35 million settlement in related private litigation and coordination with investors seeking further recoveries. Akazoo consented to the judgment without admitting or denying the allegations, waived appeals, and the court retained jurisdiction to enforce the terms while vacating a prior stipulation.
Akazoo S.A., a Swiss-based company, engaged in securities fraud by fabricating financial statements and inflating key metrics to deceive investors and raise over $100 million in capital. The U.S. Securities and Exchange Commission filed a complaint, leading to an agreed final judgment in which Akazoo consented to a $38.8 million disgorgement of ill-gotten gains without admitting or denying the allegations, except as to jurisdiction. The court ruled that this disgorgement obligation would be satisfied through Akazoo’s $35 million settlement in related private investor litigation, including cases in the Eastern District of New York and Georgia Superior Court, with further coordination for potential additional recoveries. The judgment incorporated prior consent agreements, vacated a previous stipulation entered on October 23, 2020, and explicitly reserved jurisdiction for the court to enforce compliance. Akazoo waived all rights to appeal and agreed to full compliance with the terms of the judgment. The case underscores the SEC’s enforcement actions against cross-border fraud and the use of coordinated settlements to maximize investor recovery.
Extracted insights
- $38.80M $38.8 million $10M–$100M
- $35.00M $35 million $10M–$100M
- agency Securities and Exchange Commission
- SEC filed Complaint against Akazoo S.A.
- Akazoo S.A. is liable for disgorgement of $38.8 million
- Akazoo S.A. shall pay $35 million to investors in settlement
- Case 1:20-cv-08101-AKH filed October 27, 2021
- Stipulation and Order entered October 23, 2020
- In re Akazoo S.A. Securities Litigation case number 1:20-cv-01900-BMC (E.D.N.Y.)
- Pareja, et al. v. Apostolos N. Zellios, et al. case number 2020CV33741 8 (Superior Court for the State of Georgia, Fulton County)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
AKAZOO S.A.,
Defendant.
l:20-cv-08101-AKH
ECFCASE
JURY TRIAL DEMANDED
AGREED FINAL JUDGMENT
The Securities and Exchange Commission having filed a Complaint and Akazoo S.A.
("Defendant") having entered a general appearance; consented to the Court's jurisdiction over
Defendant and the subject matter
of this action; consented to entry of an agreed judgment as to
injunctive relief (Dkt. Nos. 59-6 I); consented
to entry of this Final Judgment without admitting
or denying the allegations
of the Complaint (except as to jurisdiction and except as otherwise
provided
in the Consent); waived findings of fact and conclusions of law; and waived any right
to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is liable for
disgorgement
of$38.8 million representing net profits gained as a result of the conduct alleged in
the Complaint. Defendant's obligation to pay $38.8 million shall be deemed satisfied upon final
approval
of Defendant's pending settlement agreements with investors in related private
litigation, pursuant to which Defendant will pay $35 million and coordinate with investors in
seeking potential additional recoveries, See In re Akazoo S.A. Securities Litigation, Case No.
I :20-cv-01900-BMC (E.D.N.Y.) and Pareja, et
al. v. Apostolos N. Ze1,1os, et al., Case No.
2020CV3374
l 8 (Superior Court for the State of Georgia, Fulton County).
II.
IT
JS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
shall comply with all
of the undertakings and agreements set forth therein.
III.
1T IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Stipulation and
Order entered on October 23, 2020 (Dkt. No. 40) is vacated.
JV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Comt shall retain
jurisdiction
of this matter for the purposes of enforcing the terms of this Final Judgment.
Dated: October 2
7, 2021
Cl['. /4. )"'$3.r;~--
UNITED STATES DISTRICT JUDGE
2Case 1:20-cv-08101-AKH Document 78 Filed 10/27/21 Page 1 of 2
Case 1:20-cv-08101-AKH Document 72-2 Filed 08/16/21 Page 2 of 3
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
AKAZOO S.A.,
Defendant.
l:20-cv-08101-AKH
ECFCASE
JURY TRIAL DEMANDED
AGREED FINAL JUDGMENT
The Securities and Exchange Commission having filed a Complaint and Akazoo S.A.
("Defendant") having entered a general appearance; consented to the Court's jurisdiction over
Defendant and the subject matter of this action; consented to entry of an agreed judgment as to
injunctive relief (Dkt. Nos. 59-6 I); consented to entry of this Final Judgment without admitting
or denying the allegations of the Complaint (except as to jurisdiction and except as otherwise
provided in the Consent); waived findings of fact and conclusions of law; and waived any right
to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is liable for
disgorgement of$38.8 million representing net profits gained as a result of the conduct alleged in
the Complaint. Defendant's obligation to pay $38.8 million shall be deemed satisfied upon final
approval of Defendant's pending settlement agreements with investors in related private
litigation, pursuant to which Defendant will pay $35 million and coordinate with investors in
Case 1:20-cv-08101-AKH Document 78 Filed 10/27/21 Page 2 of 2
Case 1:20-cv-08101-AKH Document 72-2 Filed 08/16/21 Page 3 of 3
seeking potential additional recoveries, See In re Akazoo S.A. Securities Litigation, Case No.
I :20-cv-01900-BMC (E.D.N.Y.) and Pareja, et al. v. Apostolos N. Ze1,1os, et al., Case No.
2020CV3374 l 8 (Superior Court for the State of Georgia, Fulton County).
II.
IT JS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
shall comply with all of the undertakings and agreements set forth therein.
III.
1T IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Stipulation and
Order entered on October 23, 2020 (Dkt. No. 40) is vacated.
JV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Comt shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.
Dated: October 2 7, 2021 Cl['. /4. )"'$3.r;~--
UNITED STATES DISTRICT JUDGE
2