The Securities and Exchange Commission today announced charges against S-Ray Incorporated, a private start-up formerly based in Vancouver, Washington, and its CEO, Stephen A. Baird, of Terrebonne, Oregon, for raising at least $2 million from dozens of investors since at least 2018 by making false claims about customers, orders for its products and revenue potential.

According to the SEC's complaint, Baird founded S-Ray in 2010 to develop ultrasound technology for use in dentistry. By 2018, the company allegedly had only developed a couple of prototypes but had not sold any products, and by 2019, the company's last remaining employee, aside from Baird, left the company. The SEC's complaint alleges that Baird nonetheless continuously sold S-Ray shares to investors, many of whom are dentists and orthodontists, by misrepresenting that the company had booked $1 million worth of orders from customers and that it would soon be earning tens of millions of dollars in annual revenue.

The SEC's complaint further alleges that Baird told investors that additional investments in S-Ray would be used for revenue-generating purposes and he would forgo his salary and bonus, giving the false impression that he was not benefiting from S-Ray's securities offering. However, from May 2019 through May 2021, Baird allegedly used almost half of the proceeds from S-Ray's securities offering to pay himself and his wife back for loans that Defendant Baird purportedly had made to S-Ray.

The SEC's complaint charges S-Ray and Baird with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks injunctive relief, disgorgement plus prejudgment interest and civil penalties from S-Ray and Baird, and an order prohibiting Baird from acting as an officer or director of a publicly traded company and from participating in the issuance, purchase, offer or sale of any security.

The SEC's investigation was conducted by Robert J. Durham Jr., and supervised by Jennifer J. Lee of the San Francisco Regional Office. The SEC's litigation will be led by Susan F. LaMarca and Mr. Durham.