A former technology executive has been ordered to pay $97,500 for hindering an SEC whistle-blower

The co-founder of a Las Vegas-based software business has agreed to pay a $97,523 fine to resolve allegations by the Securities and Exchange Commission (SEC) that he obstructed a whistle-blower's communication with the agency over a securities law violation.

Without admitting or contesting the SEC's allegations, David Hansen, co-founder and former chief information officer of fraud detection and prevention software business NS8, consented to pay the penalties for breaching the SEC's whistleblower rule. Additionally, he agreed to a cease-and-desist order.



According to the SEC's ruling, an NS8 employee voiced concerns internally in 2018 and 2019 that the firm was exaggerating its client statistics in order to deceive the public and investors about its financial health. The whistle-blower brought the issues to the attention of many NS8 officials, including Hansen, despite the fact that he did not directly report to Hansen.


The ruling said that the whistle-blower provided the SEC with a tip in July 2019.


After a month, the whistle-blower informed Hansen that “unless NS8 addressed this inflated customer data, he would reveal his allegations to NS8’s customers, investors, and any other interested parties.” Later that day, the order stated, he repeated the same assertion to his manager.


According to the SEC, Hansen and the company's CEO responded by removing the whistle-blower's access to NS8's computer system, including access to client data. Hansen allegedly advised the CEO that he could utilize the company's "agent" feature to monitor the whistle-blower's laptop activity. Hansen also allegedly gained access to the whistle-blower's "keeper" folder, which contained his passwords for his personal email, job search website, and social networking sites.


Hansen, the order stated, left the whistle-blower's open laptop and passwords in the CEO's office. The ruling said that the whistle-blower's personal accounts were accessed using his business laptop.


Later that week, the CEO terminated the whistle-blower, according to the SEC. Although not named in the order, Adam Rogas, NS8's CEO at the time, pled guilty in March to one count of securities fraud in the United States District Court for the Southern District of New York. According to the Justice Department, Rogas cheated investors of more than $100 million by claiming the firm booked income that never existed. Rogas is scheduled to be sentenced in August.


NS8 declared bankruptcy in 2020, renamed itself Cyber Litigation, and was ordered by a judge in March to reimburse investors $38 million, Bloomberg Law reported.


Commissioner Hester Peirce voted against the SEC's settlement with Hansen, stating in a dissenting statement that the order “does not explain what, precisely, Mr. Hansen did to hinder or obstruct direct communication between the NS8 employee and the Commission.”


“How did Hansen’s actions as set forth in the order remove the NS8 employee’s access to the IT systems, let alone stand in the way of the NS8 employee’s direct communication with the Commission?” Peirce asked in her statement. “In my view, they quite plainly did not.”

By fLEXI tEAM