A new Securities and Exchange Commission lawsuit may provide a lesson in just how easy it is for companies to deceive investors and consumers through the manipulation of online data.

The agency announced on Thursday that it reached a consent settlement with former directors and officers of Giga Entertainment Media for, among other things, allegedly paying outside companies to download its flagship video editing app Selfeo to drive up its rankings in the Apple Store and then hiding this fact from investors.

The civil lawsuit also claims that defendants conspired to cover up the fact that the person who served as Giga's de facto CEO, Gary Nerlinger, 60, of Nassau County, N.Y., was convicted of mail fraud in 1987 and sentenced to six months in prison.

Among the ways the officers attempted to hide Nerlinger's criminal record from investors was to pay companies to move stories about his conviction down on Google search lists, partly by flooding the internet with websites containing positive stories about him, the lawsuit said.

The paid downloads and manipulated Google search lists, however, were not fraudulent, according to the SEC, which noted that these are legal tactics, with an array of legal businesses available to carry them out. The fraud, the SEC stressed, lay in Giga's use of these data manipulation techniques to deceive investors.

"Exposing Giga's fraud should remind companies that they cannot buy a crowd and then claim to be popular," said Melissa R. Hodgman, the SEC's associate director of enforcement, in a statement. "Tech companies can buy clicks or employ other new marketing tools to improve their online image, but they have to be honest with investors when touting the fruits of such efforts."

The lawsuit noted that since July 2013, Giga Entertainment has sold about $12 million worth of securities to about 300 investors.

In addition to Nerlinger, the Giga Entertainment officers and directors named in the lawsuit are Lawrence Silver, 76, of Walnut Creek, Calif.; Alfred Colucci, 65, of Glenolden, Pa.; Charles Noska, 75, of Red Hill, Pa.; and Jarret Streiner, 43, of Parkland, Fla.

Without admitting to or denying the findings, the defendants consented to the entry of an SEC order finding that they violated antifraud provisions of federal securities laws, the SEC said. Colucci and Noska have each agreed to pay a $25,000 penalty, and Streiner agreed to a $15,000 penalty, while the U.S. District Court will decide penalties for Nerlinger and Silver. Nerlinger, Silver and Colucci agreed to permanent bars from serving as officers and directors, while Silver agreed to a five-year bar.

The lawsuit claims that between February and August 2016, Giga Entertainment bought at least 559,662 downloads from outside marketing firms to boost the profile of Selfeo on the Apple Store rankings. Nerlinger and the other officers, however, kept this a secret from investors, and claimed the spike in downloads was due to marketing tactics like billboards and radio advertisements, the SEC said.

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