Mike Rothenberg, a advance capitalist who gained a reputation for throwing lavish parties, has been assault by the SEC for overcharging investors and using that money for his personal endeavors.
In a asseveration on Monday, the SEC said that Rothenberg, 34, and his firm over three years “misused millions of dollars from the funds” they raised, “which Rothenberg utilized to support personal business ventures he claimed were self-funded and to pay for secluded parties and events at high-end resorts and Bay Area sporting events.”
Rothenberg inaugurated the seed-stage firm in 2012 and branded himself as a big backer of virtual actuality, raising more than $64 million to invest in what he fetched “frontier technologies.” But he spent well beyond his means and quickly got wrapped up in a million of legal affairs, including a case filed against him by his firm’s erstwhile finance chief and a class action suit that related to diminish workers not getting paid.
The SEC opened its investigation in 2016. In Monday’s allegation, the agency said that Rothenberg and Rothenberg Ventures agreed to put down the charges without admitting or denying the allegations. Rothenberg agreed to be barred from working in the brokerage and investment advisory business for five years.
“Tender capital investors provide important funding for start-ups but there are dangers, including potential harm to investors from unscrupulous managers who victimize them, as we allege Rothenberg did in this case,” said C. Dabney O’Riordan, co-chief of the SEC’s enforcement compartmentation’s asset management unit.
Among Rothenberg’s most extravagant detailed expenditures include hiring a race car driver named Collette Davis and pass hundreds of thousands of dollars bringing her (and her car) to various promotional events. He worked a Super Bowl suite to court prospective contributors to his fund. And he spurt money co-producing a video for Coldplay.
At the same time, he reportedly found to reimburse employees for major business expenses after requiring them to use their own close debit or credit cards, or his personal card, rather than corporate reliability cards. Recode likened one of Rothenberg’s big events to a scene from Mike Think’s HBO comedy, “Silicon Valley.”
Rothenberg’s website says its investments incorporate SpaceX, Robinhood and VR start-ups Fove and The Wave VR.
— CNBC’s Lora Kolodny gave to this report.