SEC Charges S2A Modular Founders With $65 Million Offering Fraud; Pair Agree to Settle
The U.S. Securities and Exchange Commission announced in a litigation release dated July 24, 2026, that on July 23 it had filed settled charges in the U.S. District Court for the Northern District of California against Brian Kuzdas and John Rowland, co-founders of modular construction company S2A Modular Corp., alleging an offering fraud. The SEC alleges the two men misused significant portions of investor funds and misled investors about customer demand and the prospects for institutional investment.
According to the complaint, from approximately April 2018 through January 2025 the pair raised about $65 million from nearly 350 retail investors nationwide to build and operate modular-building “MegaFactories” across the United States. Investors were told their money would be used only for the specific factory they chose, but the complaint alleges the defendants diverted a substantial portion to another factory in Patterson, California without telling them; that from 2020 through 2023 they falsely claimed more than 600 units under contract when they had obtained only around 100 customer contracts by the end of 2024; and that from 2022 through early 2025 they repeatedly claimed institutional investment was imminent despite knowing it was not.
Without admitting the allegations, Kuzdas and Rowland consented to final judgments, subject to court approval, permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, ordering each to pay a $200,000 civil penalty, and imposing two-year officer and director bars on each. The case is No. 5:26-cv-07616.
Source: U.S. Securities and Exchange Commission
Published by GSM · USA (original Chinese edition)
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