Investors who bought Netcapital (NCPL) securities between December 15, 2021 and September 3, 2026 may be covered by a proposed class action alleging Netcapital reported revenue from sham consulting agreements with companies controlled by an insider, claims the SEC also makes in its own lawsuit. No class has been certified and there is nothing to file yet.
Allegations Only · No Settlement Yet
This article describes a class action complaint and a related SEC complaint. The statements below are unproven allegations. Netcapital Inc. and the individual defendants have not been found liable, there is no certified class, and nothing to claim at this time. This page is informational and is not legal advice.
What Is This About?
A Netcapital investor filed a proposed securities class action against Netcapital Inc. on October 8, 2026 in the U.S. District Court for the District of Massachusetts. The case is Chance v. Netcapital Inc., No. 1:26-cv-14584. It is brought on behalf of everyone who acquired Netcapital securities on the Nasdaq between December 15, 2021 and September 3, 2026.Netcapital is a Boston-based company whose subsidiaries run an SEC-registered funding portal where small companies raise money through online crowdfunding, and offer consulting to companies planning those offerings. Its stock trades on the Nasdaq under the ticker NCPL. The complaint alleges that Netcapital inflated its revenue with sham, backdated and in some cases forged consulting agreements with startups controlled by an insider, John Fanning, and that its public statements about its business were therefore false. Those allegations track a lawsuit the Securities and Exchange Commission filed two months earlier.
The defendants are Netcapital, former chief executives Cecilia Lenk and Martin Kay, chief financial officer Coreen Kraysler, and Fanning. The case is at the complaint stage: no defendant has responded on the docket, no class has been certified, and there is no settlement, fund or claim form.
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The SEC’s Case Against Netcapital
On August 10, 2026, the SEC sued Netcapital, Fanning, Kraysler, Kay, Lenk and a fifth individual in the same federal court, in a case captioned SEC v. Fanning, No. 1:26-cv-13665. The SEC alleges that from about October 2021 through January 2024, Netcapital recognized nearly $14 million in revenue from consulting agreements between its Netcapital Advisors subsidiary and at least eleven startups that Fanning controlled. According to the SEC, the agreements were backdated shams, some were forged, and they produced no real revenue.The SEC says that revenue inflated Netcapital’s reported revenue for the period by about 345% and was included in its SEC filings and offering materials, while investors put more than $25.6 million into Netcapital’s public and private offerings. It describes Fanning as acting as a Netcapital officer while controlling the startups through intermediary companies. The SEC seeks injunctions, civil penalties and other relief, including disgorgement from most of the defendants.
Two days after filing, on August 12, 2026, the court entered a final judgment against Lenk on her consent, without her admitting the SEC’s allegations. It permanently enjoins her from violating two negligence-based antifraud provisions of the Securities Act and orders a $50,000 civil penalty. No court has found Netcapital or any other defendant liable.
What the Class Action Alleges
The investor complaint relies heavily on the SEC’s allegations. It claims that throughout the class period Netcapital’s statements about its revenue and business were false or misleading because the revenue came from sham agreements, the consulting work was minimal, the deals were undisclosed related-party transactions involving Fanning, and the company’s Sarbanes-Oxley certifications were false. It brings claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.The complaint ties three events to declines in Netcapital’s stock price. It says the shares fell 12.8% the day after the SEC filed suit. It says they fell another 28.6% after Netcapital disclosed on August 17 that its outside auditor had resigned, citing the SEC case. And it says they fell about 8% and then 13% over the next two trading days after Netcapital disclosed on September 3 that a board member had resigned, citing the allegations against the company and its current and former leaders. None of the class action’s allegations has been tested in court.
Who Is in the Proposed Class?
The proposed class is every person and entity, other than the defendants, that acquired Netcapital securities publicly traded on the Nasdaq between December 15, 2021 and September 3, 2026, inclusive, and was damaged as a result. Netcapital’s officers and directors, the individual defendants’ immediate families and entities the defendants control are excluded.The class covers Netcapital’s own stock and other securities. Money invested through the Netcapital portal in other companies’ crowdfunding offerings is not part of the proposed class. The definition can change, and the class exists only as a proposal until a court certifies it.
What Happens Next
Under the Private Securities Litigation Reform Act, the plaintiff’s law firm published a notice of the case, and investors have until December 7, 2026 to ask the court to appoint them lead plaintiff. That date comes from the notice, not from a court order. After the court picks a lead plaintiff and lead counsel, an amended complaint usually follows, and the defendants typically move to dismiss.The complaint asks the court to certify the class and award damages, interest, costs and attorneys’ fees, and it demands a jury trial. It was filed by The Rosen Law Firm. Members of a proposed securities class generally remain in the class without seeking the lead plaintiff role. There is no money available unless the case produces a settlement or judgment, which would come with its own notice and claim process. Any money the SEC collects in its own case is handled separately from the class action.
Questions
Is the Netcapital class action the same case as the SEC lawsuit?
No. SEC v. Fanning is an enforcement action the Securities and Exchange Commission filed on August 10, 2026, seeking injunctions, penalties and other relief. Chance v. Netcapital Inc. is a separate private lawsuit filed October 8, 2026 on behalf of investors, seeking damages. The class action relies heavily on the SEC’s allegations, and both cases are in federal court in Boston.
Does the Netcapital lawsuit cover people who invested in startups through the Netcapital funding portal?
Not as the class is currently defined. The proposed class covers people who acquired Netcapital Inc.’s own publicly traded securities on the Nasdaq between December 15, 2021 and September 3, 2026. Investments made through the Netcapital portal in other companies’ crowdfunding offerings are not part of that definition.
What is the December 7, 2026 deadline in the Netcapital case?
It is the deadline, stated in the plaintiff’s law firm’s notice, for investors to ask the court to appoint them lead plaintiff under the Private Securities Litigation Reform Act. It is not a claim deadline. Members of a proposed securities class generally remain in the class without seeking that role, and there is no money or claim form available.
Has anyone been found liable in the Netcapital cases?
No court has found Netcapital or any individual defendant liable. In the SEC case, former chief executive Cecilia Lenk consented on August 12, 2026 to a final judgment, without admitting the SEC’s allegations, that enjoins her from certain securities law violations and imposes a $50,000 civil penalty. The class action was filed October 8, 2026, and its allegations are unproven.
Sources
- CourtListener docket — Chance v. Netcapital Inc., No. 1:26-cv-14584 (D. Mass.)
- Class action complaint — filed October 8, 2026 (36 pages)
- SEC complaint — SEC v. Fanning, No. 1:26-cv-13665 (D. Mass., filed August 10, 2026)
- Final judgment as to Cecilia Lenk — SEC v. Fanning (August 12, 2026)
- Plaintiff’s counsel’s notice — class period and the December 7, 2026 lead plaintiff deadline (PR Newswire)
