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The U.S. Securities and Exchange Commission has filed a lawsuit against BorrowMoney.com Inc. and its CEO, Aldo Piscitello, accusing them of fabricating the company's revenue for several reporting periods.

SEC Files Complaint in Fort Lauderdale Federal Court

In its complaint lodged on Wednesday, the SEC claims that BorrowMoney.com Inc., a penny stock issuer, and Piscitello reported predominantly imaginary revenue in the company's first three quarterly filings. The SEC stated that the remaining revenue did not conform to generally accepted accounting standards for revenue recognition.

Misleading Financial Statements and Auditor Resignation

The SEC alleges that BorrowMoney.com issued a misleading mea culpa a few quarters later, announcing that its auditor had resigned and that previous quarterly reports were misstated. Despite this, the company failed to admit that the earlier revenue disclosures were entirely fictitious.

"The improper revenue recognition was not due to misclassifications," the SEC noted, "but rather that it should not have disclosed revenue at all in the earlier quarterly reports."

The regulator further claimed that BorrowMoney.com has not yet acknowledged that the previous revenue statements were fictitious or did not meet revenue recognition criteria.

BorrowMoney SEC Suit : CEO's Undisclosed Stock Ownership and Audit Issues

Piscitello is also accused of failing to disclose his beneficial ownership of BorrowMoney.com's stock, despite owning the vast majority of shares and profiting nearly $38,000 from stock sales. The SEC highlighted that four audit firms had dropped the company as a client over five years, and it currently has no auditing firm.

Company Operations and Investor Solicitation

BorrowMoney.com, based in Fort Lauderdale, began trading over the counter in October 2019, with its stock registered in June 2020. The company purports to operate an online marketplace connecting borrowers and lenders. Its website claims to help consumers find "every conceivable type of loan, insurance, credit card, and card product available at competitive rates."

BorrowMoney SEC Suit : SEC's Detailed Allegations

According to the SEC, BorrowMoney.com also solicits investors via its website, claiming in an investor presentation that it generates revenue from subscription lead packages, pay-as-you-go lead sales, ads, and listing services. The company touted its domain name, BorrowMoney.com, as providing a distinct advantage over other online lending competitors.

However, the SEC alleges that the company's reported revenue in its quarterly filings was attributed to lead generation services and that most of these purported customers were unaware of or had no business with BorrowMoney.com. The SEC claims that nearly 99% of the reported customer payments were actually personal funds from Piscitello, transferred to company accounts to simulate revenue.

BorrowMoney SEC Suit : Response to the Allegations

On Thursday, the SEC declined to comment on the case, and representatives for BorrowMoney.com did not immediately respond to requests for comment. The SEC is represented by Russell Koonin, and counsel information for the defendants was not immediately available.