Nova Labs, Inc.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26291 / April 24, 2025
Securities and Exchange Commission v. Nova Labs, Inc., No. 1:25-cv-00539 (S.D.N.Y. filed Jan. 17, 2025)
SEC Obtains Final Judgment Against Wireless Network Creator for Misrepresentations Concerning Network Users
On April 23, 2025, the Securities and Exchange Commission obtained a final judgment by consent against Nova Labs, Inc., the creator of a purportedly decentralized wireless network known as the Helium Network. The Commission had charged Nova Labs with making misrepresentations in connection with its offer and sale of preferred stock in a private placement.
The SEC’s complaint, filed in the United States District Court for the Southern District of New York on January 17, 2025, alleged, in relevant part, that Nova Labs made materially false and misleading statements to prospective equity investors about prominent companies, such as Lime, Nestlé, and Salesforce, purportedly using, being current users of, or relying on the Helium Network when those companies were not in fact using the network.
The final judgment only relates, and is limited to, the Commission’s allegations in the complaint that Nova Labs violated Section 17(a)(2) of the Securities Act of 1933 by making misrepresentations in connection with its offer and sale of preferred stock in a private placement. The SEC dismissed with prejudice other claims alleged in the complaint. The Commission’s decision to exercise its discretion and dismiss such claims rests on its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not any assessment of the merits of the claims alleged in the action. The Commission’s decision to seek dismissal of such claims does not reflect the Commission’s position on any other case.
Nova Labs consented to entry of the final judgment, without admitting or denying the allegations in the complaint, which orders it to pay a $200,000 civil penalty.
The SEC’s litigation was conducted by Emmy E. Rush and Christopher Colorado and was supervised by Judith Weinstock, Sheldon L. Pollock, Thomas P. Smith, Jr., and Jack Kaufman, all of the SEC’s New York Regional Office.