WEST PALM BEACH, Fla. (CN) – Investors are asking a South Florida judge to freeze mobile-app developer Stocket’s account and appoint a corporate monitor in the wake of a purported FBI raid on the company’s offices.
A group of 16 investors have told Palm Beach Judge Cymonie Rowe that Stocket Inc. ceased operations after the federal raid, and that millions of shareholder dollars are in limbo.
The Boca Raton-based business had planned to sell a mobile phone app that would allow users to set up online retail shops inside a cartoon-software environment.
The application would “combine fun game experiences with e-commerce shopping,” as the company marketed it. The concept garnered more than $10 million worth of investment funds for Stocket and its predecessor company Social Voucher.com Inc.
The investors from the Florida court case say their individual investments in the business ranged from $3,750 up to two million dollars. Most of the investments were placed before Stocket Inc. acquired the software from the predecessor company in early 2018.
In an injunction request published in civil court records Monday, the investors say they recently discovered the business violated federal securities law by selling shares “through unregistered brokers,” who were paid outsized commissions.
“These actions (and possibly others still unknown to Plaintiffs)” precipitated an FBI raid on Stocket’s offices in June 2018, the investors allege. Federal agencies “are currently investigating Stocket and [Social Voucher.com Inc.’s] affairs, as the government seized and is in possession of their books and records,” the investors claim.
The raid couldn’t have come at a worse time, the investors claim. The software was wrapping up beta testing, and the company was talking with an investment banking firm about further bankrolling a commercial release, according to the pleading.
Represented by the law firm of Levine Kellogg, the investors say the fallout from the raid also put the company in danger of missing a deadline for a patent document filing related to the game’s software algorithm. Though Stocket’s patent counsel “has stopped work and not been paid,” the plaintiffs “are in direct contact” with them to protect the intellectual property, the pleading reads.
The plaintiffs are requesting access to Stocket’s financial records, a freeze on their investment funds in any Stocket account, and a court-appointed agent to oversee the company’s assets.
Attempts to reach Stocket Tuesday by phone and email were not successful. The company’s web site has gone offline; two phone numbers previously associated with it are no longer connected.