StrongRoom AI founder admits 'discrepancies' but blames EVP's losses on its due dilligence
Though admitting to financial irregularities in his company's books, StrongRoom AI founder argues he is not liable for fraud.
The chief executive of StrongRoom AI has denied he purposefully defrauded investor EVP, and alleges the losses suffered by the VC after investing in his company are due to its own due diligence failures.
In defence documents filed with the Federal Court, StrongRoom AI co-founder Max Mito argues details given to EVP before its $10.4 million investment were intended only as a starting point for the firm to "undertake its own investigations."
Mito's defence argues that any losses that resulted after — the startup was valued at nearly $70 million in March but sold for just $3 million in June — are due to a failure to carry out those investigations.
"The DD Information was provided to EVP for the purpose of permitting it to undertake its own enquiries as to whether or not it wished to make an investment," the document reads. "EVP is, and otherwise comprises and employs, highly trained and experienced investors."
