Canadian AI Founder Faces U.S. Fraud Charges Over $120M Fundraising Scheme

The former CEO and founder of a Canadian artificial intelligence company is facing U.S. charges for allegedly deceiving investors to raise venture capital.

Matthew Derrick Hudson, who launched Invenia Technical Computing Corp. — a firm that claimed it would use AI to optimize participation in North America’s energy markets — has been accused of wire fraud. Prosecutors allege he fabricated financial statements, invoices, and other records to mislead investors about the company’s performance.

In a separate civil case, the U.S. Securities and Exchange Commission (SEC) also charged Hudson with securities law violations.

According to the SEC, Hudson raised capital in two rounds between October 2020 and January 2022 by misrepresenting Invenia’s finances, “including by producing falsified balance sheets, invoices, and other supporting documents.”

Court filings state that just before the company’s Series B funding closed, Hudson told investors Invenia had C$218 million in cash and C$295 million in revenue, when in reality it had only C$6 million and C$26 million, respectively.

The SEC further alleged that one funding round was unauthorized by the company’s board. “To execute that deal, Hudson allegedly circulated fake investor lists, fabricated board resolutions, and closing paperwork, including one set with forged signatures from purported investors,” regulators said.

The alleged scheme helped the company secure roughly US$120 million from backers.

Authorities emphasized that the allegations have not yet been proven, and Hudson is presumed innocent until trial.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, seeks permanent injunctions, repayment of ill-gotten gains plus interest, financial penalties, and a ban on Hudson serving as an officer or director.

Hudson was arrested last week in California and released on bond. His next federal court appearance is scheduled for November 17.