Game Designer Robert Alexander Charged with Fraud by SEC
The Securities and Exchange Commission has charged Las Vegas online game developer, Robert Alexander, with fraud. Robert Alexander is the chief executive of Kizzang, LLC, which the SEC claims he used to bilk investors of $1.3 million, with about $450,000 going towards gambling debts.
Kizzang’s founder (picture right, in yellow ballcap) was a key figure in the creation of Grand Theft Auto. Though Robert Alexander sounds like a problem gambler, his issues with money go far beyond that.
Alexander raised roughly $9 million from more than 50 investors showing interest in Kizzang, LLC., which is an alleged online gaming business.
The SEC alleges Robert Alexander made misrepresentations to potential investors in his company. The federal securities regulator said Alexander told his investors they would make a minimum of ten times their investment.
In the complaint, the SEC claims Alexander claimed he had invested millions of dollars into Kizzang, while donating $50 million to charity. He also took credit for the creation of a successful video game.
Took $1.3 Million in Company Funds
Robert Alexander is accused of using his $1.3 million in embezzled funds to fuel his luxurious life style. He want on shopping sprees, bought high end entertainment, and paid down his credit card bills.
The SEC complaint said he also put some of it towards his daughter’s expenses, such as her luxury car payments and her culinary school tuition. None of the expenses were reported to investors. Alexander even used over $450,000 of it and went on gambling sprees.
Seeks Injunctions, Penalties, Disgorgement
In the SEC filing, Alexander and Kizzang are accused of violating Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act, Rule 10b-5.
The SEC said it “seeks permanent injunctions, civil monetary penalties, and disgorgement of ill-gotten monetary gains plus interest from Alexander.”
The lawsuit was filed in the U.S. District Court for the Southern District of New York (SDNY) – the most aggressive US Attorneys Office in the United States. The SDNY’s filing stated the investigation was handled by, “Cecilia B. Connor and Andrew Elliott, and supervised by Ms. Welshhans and Amy L. Friedman, with assistance from Janet Yang. The SEC’s litigation will be handled by Martin Healey.”
Robert Alexander Profile
Up until now Alexander had a relatively reputable record. He has been responsible for contributing to the success of some of the world’s top video games, including Grand Theft Auto. He also established game distribution through Game Ballers, COKeM International, and Jack of All Games. These companies earned him huge profits.
In his 28 years in the gaming business, Robert Alexander had become known for his “uncanny ability to know what consumers want.”
He also has been said to have a knack for knowing how to position games in the marketplace, discern what competitive products lack, and design superior games to the competition. Those were his mission statement when launching his latest venture, Kizzang.
Robert Alexander on Kizzang’s Founding
At the time he founded the company, the gaming mogul said, “I started Kizzang because my competitors left me no other choice: their games were universally lacking. As an incredibly competitive and focused entrepreneur, I am galvanized to have identified a games space with minimal competition.”
“Everyone’s chasing the real money gambling business, leaving Kizzang practically without competition in the free-to-play category. Competitors who have built their businesses around ‘freemium’ play cannot pivot to catch up to us.”
“Always Free to Play at No Cost”
The Kizzang founder talked a good game. He claimed to have changed the business model of major game publishers by offering free-to-play games. Alexander said, “By offering consumers the best games as ‘always free to play at no cost,’ along with the greatest cash giveaways, Kizzang has revolutionized the games business. I’m convinced Kizzang will soon take over the online sweepstakes and fantasy sports business.”
Like many before him, Robert Alexander’s financial downfall appears to have spurred on by gambling addiction. Research has shown that problem gambling has a correlation with shopping addiction, which is another trait the founder of Kizzang exhibited. Now Robert Alexander faces the greatest challenge of his life – beating charges from the Securities & Exchange Commission.
One hopes his troubles are a part of a big misunderstanding and he has the funds to pay back investors. If not, the many behind Grand Theft Auto might be doing time in real life.