A trading firm, Rimar Capital LLC, has settled fraud charges with the United States Securities and Exchange Commission (SEC) after being accused of falsely claiming advanced artificial intelligence (AI) capabilities to mislead investors and raise nearly $4 million. The company, along with its CEO Itai Liptz and board member Clifford Boro, has agreed to pay $310,000 in penalties to settle the charges, without admitting or denying the allegations.
In a statement released on Oct. 10, the SEC detailed how Liptz and Boro allegedly used AI “buzzwords” to attract investments for Rimar’s purported AI-driven trading platform, which claimed to manage cryptocurrencies, equities, and futures. According to the SEC’s Andrew Dean, co-chief of the Asset Management Unit, the firm’s misleading claims resulted in the raising of $3.73 million from investors.
“As AI gains traction in the investment sector, we will remain vigilant and take action against those who misrepresent their companies’ technological capabilities and engage in ‘AI washing,” said Dean.
Misleading AI Claims and Fabricated Investment Performance
The SEC’s investigation revealed that Liptz and Boro falsely promoted an AI-powered trading platform through pitch decks, emails, and posts in an exclusive investment group. However, the firm never actually had a functioning trading platform. In its order, the SEC stated that at the time of fundraising, Rimar had no stock or crypto trading application—a significant departure from the claims presented to prospective investors.
In addition to the AI allegations, the SEC also accused Liptz and Boro of overstating the assets under management for Rimar Capital LLC. While the firm claimed to manage between $16 million and $20 million, it had less than $2 million in assets. Investors were further misled by statements about the firm’s alleged success, including a claim of achieving a 46% compounded annual growth rate since 2015—a figure presented in a pitch deck.
Misappropriation of Investor Funds
According to the SEC, the deception didn’t stop at misrepresenting AI capabilities. Liptz was also accused of misappropriating company funds for personal expenses, which investors had believed would be used for marketing and development of a “Hedge Fund for Everyone” app. This further aggravated the fraud, raising doubts about the firm’s transparency and financial practices.
Settlement Terms and Consequences
Without admitting any wrongdoing, Liptz, Boro, Rimar Capital USA, and Rimar Capital LLC agreed to settle the fraud charges. The settlement includes a $250,000 civil penalty, with Liptz also agreeing to pay $213,600 in disgorgement and prejudgment interest. The settlement also imposed a five-year industry ban on Liptz, while Rimar LLC consented to be censured.
The SEC emphasized its ongoing commitment to protecting investors from misleading claims, particularly as AI becomes a more popular tool in the financial sector. The agency noted that it will continue to crack down on firms engaging in “AI washing”—using AI-related jargon to mislead and exploit investors.
This case serves as a stark reminder for investors to be cautious of firms that overpromise technological capabilities, especially in the rapidly evolving areas of AI and blockchain.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
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