Canopy Financial Turns Into Sad, Comical Game Of Hot Potato

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This morning we broke the news that Canopy Financial, no. 12 on this year’s Inc. 500 list of fastest growing companies, is a complete sham.

And it’s no surprise that today, everyone is trying to point the finger at everyone else.

The company’s investment bank, Financial Technology Partners, which has represented Canopy Financial through at least two separate rounds of fraudulent fundraising, emailed to say:

“Hi there, I’d respectfully ask for some consideration here and would like to have our information / logos / screenshots taken off of your Canopy Financial posts. We clearly had no clue about any such wrongdoing and exposure to this is not something we are interested in. Understand you guys are all about the news, but we’re a small firm and had nothing to do with this. Please pass to Michael Arrington if you don’t mind.”

Let me just highlight one part of that email – “We clearly had no clue about any such wrongdoing.” Err, what? You are the investment bank that was out pitching the deal to venture capitalists. You proudly stated that you were the company’s “sole strategic and financial advisor.” And you never made a call to KPMG to see if they actually represented the company and if their financial statements were real? A 10 second phone call could have cleared this up before investors plowed $85 million into the company.

But even better is CEO Vikram Kashyap’s comment, which comes via his attorney:

Statement from Ismail Ramsey, Vik Kashyap’s Attorney Regarding Allegations of Fraud at Canopy Financial

Vik Kashyap had no prior knowledge whatsoever of any fraud regarding Canopy’s financial statements. He is as surprised as anyone about these allegations. He relied on financial and legal professionals in accepting the authenticity of the company’s financials. Going forward, he will leave his role as CEO of Canopy, but will remain as Chairman of the Board of Directors, helping to ensure that anyone who committed fraud is held fully accountable.

I mean, sure, he’s just the CEO. What does he know? The company was engaging in long term financial fraud with completely made up numbers. And he’s the victim. Never fear, though, he’s “helping to ensure that anyone who committed fraud is held fully accountable.”

Except himself.

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