A trading firm has settled charges with the United States Securities and Exchange Commission, which the agency accused of faking its artificial intelligence capabilities and misleading its investors to raise nearly $4 million.

Rimar Capital LLC, Rimar Capital USA, their CEO Itai Liptz and Rimar USA board member Clifford Boro together paid a $310,000 civil penalty to settle fraud-related charges — which they didn’t admit or deny — the SEC said in an Oct. 10 statement.

The co-chief of the SEC’s Asset Management Unit, Andrew Dean, claimed Liptz and Boro raised $3.73 million using AI “buzzwords” to describe Rimar’s claimed “AI-driven” platform for trading cryptocurrencies, equities and futures to prospective investors.

“As AI becomes more popular in the investing space, we will continue to be vigilant and pursue those who lie about their firms’ technological capabilities and engage in ‘AI washing,’” Dean said.

The SEC alleged that Liptz and Boro made repeated claims about an AI stock and crypto trading platform through pitch decks, online posts in a members-only investment group and emails to prospective investors to raise funds.

“But the firm had no trading application at all at the time of the fundraising, and has never had a trading platform for stock or crypto assets,” the SEC claimed in its order.

The SEC also accused the pair of lying to investors about Rimar LLC’s assets under management, which the two said was between $16 million and $20 million when it “actually had less than $2 million.”

The agency also alleged Liptz and Boro lied about Rimar’s client account performance, such as obtaining a 46% compounded annual growth rate since 2015 in one pitch deck.

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Liptz also allegedly misappropriated some of the company funds for personal expenses, which investors believed would be used for marketing and making a “Hedge Fund for everyone app,” the SEC said.

Rimar USA, Rimar LLC, Liptz and Boro consented to the entry of an order finding antifraud violations and a cease and desist from violating the charged provisions without admitting fault.

Liptz agreed to pay disgorgement and prejudgment interest totaling $213,600 in addition to the $250,000 civil penalty and a five-year bar from the industry.

Rimar LLC consented to be censured.