SEC Charges Three Former Executives of Pharmacy Startup Medly Health Inc. with Defrauding Investors

The Securities and Exchange Commission today charged now-defunct digital pharmacy startup Medly Health Inc’s. co-founder and former CEO, Marg Patel, former CFO, Robert Horowitz, and former Head of Rx Operations, Chintankumar Bhatt, with defrauding investors in connection with capital raising efforts that netted the company over $170 million. According to the SEC’s complaint, from at least February 2021 through August 2022, Patel and Horowitz provided financial information to existing and prospective investors that fraudulently overstated Medly’s revenue due in part to millions of dollars’ worth of fake prescriptions entered into the company’s systems by Bhatt. The SEC’s complaint alleges, among other things, that Patel and Horowitz knew of, but failed to correct, significant accounting irregularities and were aware of several reports and complaints by employees that the revenue reported in Medly’s financial statements to investors was inaccurate.