Litigation Release No. 24482 / May 29, 2019
Securities and Exchange Commission v. Henry Ford et al., No. 19-civ-2214 (E.D.Pa., filed May 22, 2019)
On May 22, 2019, the Securities and Exchange Commission charged Fallcatcher, a purported biometric device and software startup company, and its founder, Henry Ford, with defrauding over fifty investors in the Philadelphia area of at least $5 million. The SEC secured an emergency asset freeze to preserve investor funds.
According to the SEC’s complaint, Ford, of Port St. Lucie, Florida, falsely told investors that well-known insurers and state governments had expressed interest in Fallcatcher’s technology. Ford allegedly told investors that this technology tracked patients receiving opioid addiction treatment to prevent medical billing fraud. The SEC further alleges that Ford showed investors a fabricated letter of interest from a prominent insurance company expressing an interest in starting a pilot program using Fallcatcher’s technology. In reality, however, the SEC’s complaint alleges that no insurers or state governments had ever expressed any interest in either Fallcatcher or its technology.
The SEC’s complaint, filed in federal court in Philadelphia, charges Fallcatcher and Ford with violations of 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 complaint seeks permanent injunctions, disgorgement plus prejudgment interest, and penalties.
The SEC’s investigation, which is continuing, has been conducted by Megan R. Genet, James Flynn, Kimberly Yuhas, Preethi Krishnamurthy and Steven G. Rawlings. The litigation will be led by Ms. Krishnamurthy, Karen E. Willenken and Ms. Genet under the supervision of Lara Shalov Mehraban. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.