Akazoo, a Greek firm purporting to be a music streaming service, has agreed to pay $38.8 million to settle allegations that it defrauded investors both before and after it went public through a SPAC merger.

The U.S. Securities and Exchange Commission said Akazoo grossly misrepresented the nature and success of its streaming business when it raised $54.8 million as a result of its merger in 2019 with special purpose acquisition company Modern Media Acquisition Corp. (MMAC) and while its shares were traded on the Nasdaq from September 2019 to May 2020.

Among other things, the SEC said in a civil complaint, Akazoo claimed 64.5 million euros in revenue in the first half of 2019 from operations in 25 countries when, in reality, it “generated at most negligible revenue, operated in only a few countries, and its only significant source of funds was the $54.8 million it had raised from investors.”

The settlement of the charges announced on Tuesday will be satisfied by Akazoo’s disgorgement of $35 million to investors and payment of settlements of several class action lawsuits.

“The SEC is intently focused on SPAC merger transactions, and we will continue to hold wrongdoers in this space accountable,” David Peavler, regional director of the SEC’s Fort Worth Regional Office, said in a news release.

As Reuters reports, the commission “has been ratcheting up scrutiny of SPACs … The SEC has issued investor warnings, implemented an enforcement sweep of banks involved in the transactions and has said it is looking at regulatory change.”

Before its SPAC merger, Akazoo operated as Akazoo Limited, a company organized under the laws of the U.K. with its primary place of business in Athens, Greece.

When Akazoo took its current form, it raised $14.2 million from MMAC’s shareholders and another $40.6 million from accredited investors through a private investment in public equity (“PIPE”) offering at the time of the merger.

Akazoo’s shares traded as high as $7.49 before plunging to $1.16 after a short-selling hedge fund released a report in April 2020 that concluded it was a complete scam, with negligible subscribers and revenue.

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