Guvera Found Guilty of Scamming $6.6 Million from an Alzheimer's Patient

Guvera’s pile streaming failure keeps emanating a foul odor.

Guvera raked in more than $180 million in investor funding to produce a free online music streaming service, one heavily reliant upon clever advertising.  Its Australian founders hoped that Guvera would rival services like Spotify and Pandora, though that never happened.

Instead, this became a tale mismanagement, with a lack generated funds from 2016 onward eventually leading to the collapse the company.

Initial investors waited for a successful IPO to recoup some their investment, but the company ceased operations in May 2017.  The Australian Securities Exchange stepped in and refused to allow the streaming service’s IPO over concerns damaging the exchange’s reputation.

Amma Private Equity is one the investors mixed up in this mess.  Last year, Amma was sued by an 80-year-old investor who says they knowingly took advantage his Alzheimer’s diagnosis to get him to buy more and more worthless stock.

The lawsuit filed last year on behalf Keith Messer alleged stunning negligence on behalf Amma Private Equity.  Initially Mr. Messer was approached about investing in Guvera in 2012, the same year that he received his Alzheimer’s diagnosis.

Messer’s daughter says she met with Amma ficials in 2014 to inform them her father’s condition and that he was no longer able to consider investments in the company.  Despite that meeting, Amma ficials continued to collect money from Mr. Messer for eight more months.

Amma defended itself by saying that Mr. Messer confirmed he understood music streaming and the business model the company.  Additionally, he ten asked questions that showed he understood the risks associated with the investment — at least according to Amma’s report.

The judge presiding over the case didn’t agree with Amma’s assessment the situation and ruled in favor Mr. Messer.

The judge has ordered the company to repay the full $6.6 million invested.  The judge also agreed with the prosecutor’s assessment that Amma was irresponsible in representing the future the music streaming company based on knowledge its performance.

Sadly, Guvera’s implosion is virtually the opposite Spotify’s meteoric success.  Of course, both were sniffing a similar opportunity, though the early days streaming are producing spectacular booms and busts.  And Guvera won’t be the last spectacular bust.

 


 

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