Millions of Dollars Raised From U.S. Investors for Canadian Company

Authorization for certain corporate actions is typically required by the board of directors for significant undertakings such as soliciting investors to purchase shares or interests in the company to raise capital.  While the approval process may be informal, that does not necessarily relieve those at the company from complying with the appropriate requirements and procedures. For example, if the firm seeks to raise money, typically those involved in the process on behalf of the firm usually will be required to comply with certain procedures specified by the law or the firm. Ignoring those requirements may be a violation of law or at least of corporate policies and procedures.  A recent action by the Commission presents this issue.  SEC v. Hudson,  Civil Action No. 3:25-cv-08106 (N.D. Cal. Filed Sept. 2, 2025).

Named as defendant in the action is Matthew Derrick Hudson.  He is the founder of Canadian private  technology company Invenia Technical Computing company.  The complaint alleges that about $120 million was fraudulently raised by Mr. Hudson for the private company.

The funds were raised through solicitations conducted beginning in October 2020.  At that point, Mr. Hudson began raising capital from investors.  Investors were told about the financial condition of the company, its performance and other metrics.  Those solicited were provided with lists of investors, pertinent board resolutions and closing documents. Two rounds of solicitations were conducted.

Unfortunately, the materials provided to those solicited were riddled with falsehoods.  The solicitations were not authorized; much of the information was inaccurate; and the documents contained false statements.  Indeed, one of the signatures on the closing documents had been forged. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5.  See  Lit. Rel. No. 26411 (Sept. 24, 2025).