# SEC 'AI-washing' enforcement: Rimar Capital and owner Itai Liptz pay $310,000 for an AI trading platform that didn't exist

> On 10 October 2024 the SEC announced settled charges against Rimar Capital USA, Rimar Capital LLC, owner Itai Liptz and board member Clifford Boro for false and misleading statements about Rimar's purported use of AI to run automated trading. Per the regulator, the firm raised nearly $4 million from 45 investors for a platform 'falsely described as having an AI-driven platform for trading securities' that had no such trading application. Without admitting or denying the findings, the parties agreed to $310,000 in total civil penalties, Liptz paid $213,611.25 in disgorgement and interest and was barred for five years, and Rimar LLC was censured; the penalties now sit in a Fair Fund for the 45 investors.

- Verification status: verified
- Case type: deployment
- Provider: U.S. Securities and Exchange Commission — enforcing regulator (respondents: Rimar Capital USA/LLC, Itai Liptz, Clifford Boro)
- Client: Rimar Capital, LLC / Rimar Capital USA, Inc. (Itai Liptz, owner and CEO), Investment advisory — automated trading marketed as AI-driven (named)
- Sector: fintech / US / finance
- Canonical URL: https://theinternetninja.com/stories/sec-ai-washing-rimar-capital-itai-liptz-310000-civil-penalties-2024/
- Source: The Internet Ninja (theinternetninja.com), independent verified-proof platform

## Outcomes

| Metric | Before | After |
| --- | --- | --- |
| SEC settlement (Order Release No. 33-11316, announced 10 Oct 2024) |  |  |
| Additional relief against Liptz |  |  |
| What the AI actually was |  |  |
| Investor harm and remedy |  |  |

## Verification method

Two Tier-1 SEC artifacts fetched live this session via Wayback raw captures and quote-verified — press release 2024-167 and the SEC Office of Distributions Fair-Fund page (Admin. Proc. File No. 3-22236, Order Release No. 33-11316); independent secondary is the Debevoise & Plimpton memo republished on the HLS Forum (archived)

## Full case file

## What happened

AI washing — marketing an AI capability a firm does not actually have — drew a securities
regulator on 10 October 2024. The SEC announced settled charges against Rimar Capital USA,
Inc., Rimar Capital, LLC, owner and CEO Itai Liptz, and Rimar USA board member Clifford Boro
"for making false and misleading statements about Rimar LLC's purported use of artificial
intelligence, or AI, to perform automated trading for client accounts and numerous other
material misrepresentations" ([source](https://www.sec.gov/newsroom/press-releases/2024-167))
[Source 1, Tier 1]. The regulator's Office of Distributions records that the firm marketed "an
adviser that purported to use artificial intelligence to perform automated trading for advisory
client accounts in a range of products including equities, futures, and crypto assets"
([source](https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro))
[Source 2, Tier 1].

## What was actually built

Less than advertised. The SEC found Rimar LLC "was falsely described as having an AI-driven
platform for trading securities" ([source](https://www.sec.gov/newsroom/press-releases/2024-167))
[Source 1, Tier 1]. A Debevoise & Plimpton memo summarising the Order puts it plainly: the
marketing "repeatedly referred to Rimar LLC as having an artificial intelligence-driven platform
for trading stock and crypto assets, among other products, despite having no such trading
application" ([source](https://corpgov.law.harvard.edu/2024/10/22/sec-settles-charges-for-defrauding-investors-in-ai-washing-scheme/))
[Source 3, Tier 2]. On the strength of these and related misrepresentations about the platform's
features, assets under management and performance, the respondents "raised nearly $4 million from
45 investors" between May 2022 and April 2023 ([source](https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro))
[Source 2, Tier 1]; the SEC also found Liptz "improperly used some of the sale proceeds for
personal purposes" ([source](https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro))
[Source 2, Tier 1].

## The outcome

The parties settled without admitting or denying the findings. Announcing the action, the SEC
stated "the parties agreed to settle the SEC's charges and pay $310,000 in total civil penalties"
([source](https://www.sec.gov/newsroom/press-releases/2024-167)) [Source 1, Tier 1]. The split:
Liptz "consented to pay disgorgement and prejudgment interest totaling $213,611, to pay a $250,000
civil penalty, and to be subject to an investment company prohibition and associational bar with
the right to reapply in five years. Boro agreed to pay a $60,000 civil penalty. Rimar LLC consented
to be censured" ([source](https://www.sec.gov/newsroom/press-releases/2024-167)) [Source 1, Tier 1]
($250,000 + $60,000 = $310,000; the arithmetic sums exactly). The distributions Order itemises the
disgorgement precisely: "$202,604.00 in disgorgement plus prejudgment interest of $11,007.25 for a
total of $213,611.25 ... deemed satisfied by offsets recorded in July 2024" ([source](https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro))
[Source 2, Tier 1]. Andrew Dean, Co-Chief of the SEC's Asset Management Unit, framed it on the
record: "Through entities he controlled, Liptz lured investors and clients with multiple
fabrications, including with buzzwords about the latest AI technology" ([source](https://www.sec.gov/newsroom/press-releases/2024-167))
[Source 1, Tier 1]. An independent newsroom reported the same figures firsthand: Cointelegraph
recorded that "Rimar Capital, Rimar Capital USA, their CEO Itai Liptz and Rimar USA board member
Clifford Boro together paid a $310,000 civil penalty to settle fraud-related charges," with Liptz
paying "disgorgement and prejudgment interest totaling $213,600 in addition to the $250,000 civil
penalty and a five-year ban from the industry" ([source](https://cointelegraph.com/news/sec-settles-charges-alleged-ai-washing-trading-firm))
[Source 4, Tier 2].

The penalties did not simply vanish into the Treasury. The SEC "created a Fair Fund, pursuant to
Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties collected can be distributed to
harmed investors," and on 13 March 2025 appointed a Tax Administrator for it ([source](https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro))
[Source 2, Tier 1].

## Weakest link (source honesty)

The two turning-point facts — the $310,000 penalty settlement and the finding that the advertised
AI platform did not exist — each rest first on the SEC's own record: the press release (Source 1)
and the Office of Distributions Order page (Source 2), two distinct Tier-1 regulator artifacts. The
weakest load-bearing corroborating source is the **Debevoise & Plimpton memo** [Source 3]: it is a
law-firm client alert (republished by the Harvard Law School Forum on Corporate Governance), not an
independent newsroom, so it is treated as strong secondary (Tier 2), not primary. It corroborates
the Order it summarises and supplies the one figure the SEC release rounds — the exact "$3.725
million" raised, versus the release's "nearly $4 million." The two turning-point figures are now also
corroborated by an independent newsroom, **Cointelegraph** [Source 4], which reported the $310,000
penalty and Liptz's $250,000 civil penalty firsthand; note it rounds the related figures ($213,600
for disgorgement-plus-interest against the SEC's exact $213,611.25, and $3.73 million raised against
the Debevoise memo's $3.725 million), so on those two numbers the SEC record remains the precise
source. With two distinct SEC artifacts plus two independent secondaries, the $310,000 and $250,000
figures are independently confirmed.

## How this was verified

**Method:** Two Tier-1 SEC artifacts — press release 2024-167 (10 October 2024) and the SEC Office
of Distributions Fair-Fund page for Admin. Proc. File No. 3-22236 (Order Release No. 33-11316) —
were fetched live this session through the Wayback Machine's raw captures (sec.gov blocks direct
automated fetch, so the archived capture is both the retrieval and the archive) and each quoted line
was checked against the stored capture. Two independent secondaries were captured: the Debevoise memo
via its Harvard Law School Forum republication, and Cointelegraph's 11 October 2024 report, fetched
live and archived to the Wayback Machine (capture 20260823214618) this session. **Date:** 23 August 2026. This is a documentary
honest-negative — a public regulator's enforcement record, not a client outcome — and it never
carries a green client badge.

## Related case files

- [SEC "AI-washing" — Delphia and Global Predictions, $400k penalties](/stories/sec-ai-washing-delphia-global-predictions-400k-civil-penalties-2024/) — the SEC's first AI-marketing enforcement actions, six months before Rimar, on the same antifraud theory.
- [SEC "AI-washing" — Presto Automation cease-and-desist](/stories/sec-ai-washing-presto-automation-voice-ai-drive-thru-human-agents-cease-and-desist-2025/) — a parallel SEC action policing an overstated automated-AI claim, where the work was in fact done by humans.
- [FTC v. Workado — "98% accurate" AI detector was 53%](/stories/ftc-workado-ai-content-detector-98pct-claimed-53pct-actual-accuracy-final-order-2025/) — a different U.S. regulator holding an AI vendor to the accuracy it advertised.

## Sources

1. U.S. Securities and Exchange Commission · *SEC Charges Rimar Capital Entities and Owner Itai Liptz for Defrauding Investors by Making False and Misleading Statements About Use of Artificial Intelligence (Press Release 2024-167)* · 10 October 2024 · Tier 1 · https://www.sec.gov/newsroom/press-releases/2024-167
2. U.S. Securities and Exchange Commission, Office of Distributions · *In the Matter of Rimar Capital USA, Inc., et al. (Admin. Proc. File No. 3-22236; Order Release No. 33-11316) — Harmed Investor / Fair Fund page* · last updated 17 June 2025 · Tier 1 · https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/rimar-capital-usa-inc-rimar-capital-llc-itai-royi-liptz-clifford-todd-boro
3. Benjamin R. Pedersen, Charu Chandrasekhar & Anna Moody (Debevoise & Plimpton LLP), via the Harvard Law School Forum on Corporate Governance · *SEC Settles Charges for Defrauding Investors in "AI Washing" Scheme* · 22 October 2024 · Tier 2 · https://corpgov.law.harvard.edu/2024/10/22/sec-settles-charges-for-defrauding-investors-in-ai-washing-scheme/
4. Cointelegraph · *SEC settles with trading firm in $4M 'AI-washing' scheme* · 11 October 2024 · Tier 2 · https://cointelegraph.com/news/sec-settles-charges-alleged-ai-washing-trading-firm