SEC v. Albert Saniger — U.S. Securities and Exchange Commission Litigation Release No. 26282, dated April 11, 2025.
The SEC charged Albert Saniger, founder and former CEO of Nate, Inc., for defrauding investors out of over $42 million. Saniger allegedly misrepresented the company's use of artificial intelligence (AI) in its mobile shopping app, claiming it processed transactions automatically when, in reality, it relied heavily on manual input from contract employees. The SEC seeks permanent injunctions, an officer-and-director bar, disgorgement, and civil penalties.
In Plain English
Imagine you started a company that promised to use super-smart computer programs (AI) to help people shop online. You told investors your app could automatically buy things for customers. But secretly, you were actually paying people to manually type in every order. You raised millions of dollars this way, but when the truth came out, the company failed, and investors lost their money. Now, the government is suing you for lying to get that money.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Marketing a 'Smart' Shopping App Between spring 2019 and December 2022, Albert Saniger, founder and CEO of Nate, Inc., marketed Nate as a mobile shopping application that used artificial intelligence (AI) to process transactions.
- False Claims of AI Automation Saniger told investors in Nate's Seed and Series A fundraising rounds that the app used AI, including machine learning and neural networks, to complete purchases without human involvement, touting automation rates as high as 90%.
- Concealing Manual Order Input In reality, Saniger knew that Nate relied heavily on contract employees to manually input orders placed by users on the app, especially during the Seed Round (spring 2019-April 2020).
- Misrepresenting Transaction Success Saniger also misrepresented Nate's success rate in completing transactions, failing to disclose that by the Series A Round's close in June 2021, few if any purchases were completed without manual processing.
- Deceptive Product Demonstrations During product demonstrations for investors, Saniger directed Nate engineers and others to manually process orders behind the scenes, making it appear as though the app was automatically completing purchases.
- Raising Over $42 Million Through these false and misleading statements about the company's use of AI, Saniger fraudulently solicited investments and raised over $42 million through the sale of Nate stock.
- Personal Profit from Fraud Saniger personally profited from his fraud, including selling approximately $3 million of his own Nate shares to a Series A investor in June 2021.
- Doubt Cast by News Report In June 2022, a news report raised doubts about Nate's claimed use of AI, which led to Saniger failing to complete a Series B round of funding.
- Company Ceases Operations Following the failed funding round, the company ceased operations and formally dissolved in January 2023, leaving investors with substantial losses.
The Enforcement Action
On April 9, 2025, the SEC charged Albert Saniger, founder and former CEO of Nate, Inc., with fraudulently soliciting investments by making false and misleading statements about the company's use of artificial intelligence (AI). The SEC seeks permanent injunctions, conduct-based injunctions, an officer-and-director bar, disgorgement with prejudgment interest, and civil penalties.
Named in this action: Albert Saniger.