SEC Charges C-Hear, Inc. and Former CEO with Fraud

SEC Litigation Releases

Filed February 19th, 2026

Detected February 21st, 2026

Summary

The SEC charged C-Hear, Inc. and its former CEO, Adena Harmon, with securities fraud in connection with a $4.2 million stock offering. The complaint alleges misleading statements about the company's technology and concealment of Harmon's criminal convictions, as well as misappropriation of investor funds.

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The Securities and Exchange Commission (SEC) has charged C-Hear, Inc. and its former CEO, Adena Harmon, with securities fraud. The charges stem from a $4.2 million stock offering where C-Hear and Harmon allegedly made materially misleading statements about the company's technology and failed to disclose Harmon's prior financial crime convictions. Additionally, Harmon is accused of misappropriating approximately $641,000 of investor funds from C-Hear and nearly all of the $405,000 raised from another company, Elite Performance Data Labs, LLC, for personal use.

This enforcement action requires C-Hear, Inc. and Adena Harmon to face allegations of violating securities laws, including Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, civil penalties, disgorgement of ill-gotten gains with prejudgment interest, and conduct-based injunctions against Harmon. Companies and individuals involved in securities offerings should be aware of the SEC's focus on accurate disclosures and the prohibition of fund misappropriation. Non-compliance could lead to significant financial penalties and reputational damage.

Source document (simplified)

C-Hear, Inc.; Adena Harmon

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26486 / February 20, 2026

Securities and Exchange Commission v. C-Hear, Inc., et al., No. 3:26-cv-00547-N (N.D. Tex. filed Feb. 19, 2026)

SEC Charges Texas Startup and Former CEO In Connection With Alleged Fraud in $4.2 Million Stock Offering

On February 19, 2026, the Securities and Exchange Commission charged Texas-based C-Hear, Inc. and its former CEO, Adena Harmon, with securities fraud, alleging that they made misleading statements that misrepresented C-Hear’s technology and concealed Harmon’s past criminal convictions. Harmon was also charged for allegedly making misrepresentations to investors in another company she controlled, Elite Performance Data Labs, LLC, and misappropriating investor funds in both C-Hear and Elite Performance.

According to the SEC’s complaint, between January 2019 and October 2023, C-Hear raised more than $4.2 million from at least 48 investors who purchased C-Hear stock. The complaint alleges that, during the offering, Harmon and other C-Hear representatives made materially misleading statements and omissions to investors by falsely claiming that C-Hear’s primary software product was in trials with third parties and that the federal government had tried and was unable to hack into one of C-Hear’s products, and failing to disclose that Harmon had been convicted of numerous financial crimes, including theft by check. Harmon is also alleged to have opened two bank accounts in C-Hear’s name without notifying the company, directed three investors to deposit their investment funds into these unauthorized accounts, and misappropriated approximately $641,000 of such funds for her personal benefit, including to pay personal expenses like shopping and to satisfy her outstanding criminal restitution order.

Separately, Harmon allegedly made misrepresentations to investors about Elite Performance’s business dealings, including falsely claiming that the Dallas Cowboys had placed a multimillion-dollar order for Elite Performance’s products. The complaint alleges Harmon misappropriated nearly all of the $405,000 raised from Elite Performance investors.

The SEC’s complaint, filed in U.S. District Court for the Northern District of Texas, charges Harmon with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and charges C-Hear with violating Section 17(a)(2) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder. The SEC seeks permanent injunctions and civil penalties against Harmon and C-Hear, and disgorgement with prejudgment interest and conduct based injunctions against Harmon.

The SEC’s investigation was conducted by Melanie Good of the SEC’s Fort Worth Regional Office and supervised by Jaime Marinaro. The litigation will be led by Tyson Lies and supervised by Keefe Bernstein.