Payments Unicorn Bolt Will Not Face Enforcement Action, SEC Letter Says

In a letter viewed by Forbes, the SEC said that it does not intend to recommend any action against the startup following an investigation into whether Bolt violated securities laws during fundraising.

Payments unicorn Bolt, which has been the target of a Securities and Exchange Commission (SEC) investigation for the past year, was told by the agency last month that it will likely not face any enforcement action resulting from the probe.

In an August 23 letter sent to Bolt’s counsel at Fenwick & West by the SEC’s Division of Enforcement and viewed by Forbes, the company was informed that the SEC does “not intend to recommend an enforcement action by the Commission against Bolt Financial, Inc.”

But it also notes that this communication “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation.”

Notably, the letter makes no mention of Bolt’s cofounder and former CEO Ryan Breslow, who was subpoenaed alongside the company last year, The Information reported in July. According to the report, the SEC sought details on whether federal securities laws were violated in connection with representations made to investors during Bolt’s 2021 fundraising efforts. Last January, Breslow resigned as chief executive and now serves as its executive chairman. The shift occurred not long after the 29-year-old founder published a series of controversial tweets attacking competitor Stripe and investors Y Combinator and Sequoia.

The SEC, Breslow and Bolt did not immediately respond to requests for comment.

Separate from the SEC probe, two Bolt investors and former board members, Brian Reinken of WestCap Management and Arjun Sethi of Tribe Capital Management, sent a letter to Bolt asking to inspect company records surrounding the $355 million in funding raised in its Series E round last year, which placed the company at an $11 billion valuation.