Jake Soberal and Irma Olguin, Jr.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25937 / February 5, 2024

Securities and Exchange Commission v. Soberal, et al., Case No. 1:23-cv-1585-JLT-BAM (E.D. Cal. filed Nov. 9, 2023)

SEC Obtains Judgments Against Former Co-CEOs of Tech Startup Bitwise Industries

On January 31, 2024, the U.S. District Court for the Eastern District of California entered judgments against Jake Soberal and Irma Olguin, Jr., the former co-CEOs of Fresno, California-based private technology services startup Bitwise Industries Inc., in an action alleging that they misled investors about the company’s finances.

The SEC’s complaint, filed on November 9, 2023, alleged that Soberal and Olguin made material misrepresentations and falsified documents concerning Bitwise’s cash position and historical financial performance while raising approximately $70 million from investors in 2022. According to the complaint, Soberal and Olguin created and provided investors with falsified bank records and a fake audit report that showed, respectively, inflated cash balances and higher revenues than Bitwise actually generated. Soberal and Olguin’s alleged misrepresentations and falsified materials painted Bitwise as a healthy, growing business with favorable financial performance. In reality, and as Soberal and Olguin allegedly knew, Bitwise faced constant cash shortages and was often on the brink of failure because it was unable to generate sufficient funds from its operations. As alleged, Soberal and Olguin’s scheme came to light in May 2023 when Bitwise failed to make payroll and abruptly furloughed—and then terminated—all of its hundreds of personnel.

The judgments enjoin Soberal and Olguin from violating 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 judgments further impose conduct-based injunctions as well as officer-and-director bars against both defendants, and reserve the issues of disgorgement and civil penalties for further determination by the court. Without admitting or denying the SEC’s allegations, Soberal and Olguin consented to the entry of the judgments.

The SEC’s ongoing investigation is being conducted by Drew Liming and John Roscigno, under the supervision of Rahul Kolhatkar and Jason H. Lee, all of the SEC’s San Francisco Regional Office. The SEC’s litigation is being led by Marc D. Katz and Mr. Liming.