Akazoo investors are suing an auditor who allegedly gave the company a clean bill of health, despite turning out to be a 'complete sham.'
In a lawsuit filed Tuesday in Georgia federal court, a group of investors said the fault for that alleged fraud lies partly on accounting firm Crowe U.K. LLP – arguing that the auditor convinced them to put millions into a company that was later “revealed to be a complete fabrication.”
Akazoo went public in 2019 via a special purpose acquisition company, or SPAC, receiving nearly $55 million from investors. But the U.S. Securities and Exchange Commission leveled charges in 2020 that the company had blatantly lied to investors. Akazoo allegedly told investors that it had 4.6 million paying subscribers and $120 million in annual revenue; the SEC claimed it had actually had “no paying users and, at most, negligible revenue.
“Crowe bears direct responsibility for plaintiffs’ losses from Akazoo,” the investors wrote. “Crowe negligently performed its work as an auditor and — based on what it learned and ignored about the Company and its purported business — should never have issued its auditor’s report on the company’s financial statements, much less one with an unqualified or ‘clean’ opinion.”
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