AudioEye Announces Dismissal of Lawsuit Against Company and CEO David Moradi

Rhea-AI Summary

AudioEye (AEYE) announced that the Supreme Court of New York has fully dismissed a lawsuit filed by former employee David J. Kovacs against the company, CEO David Moradi, and Board Chairman Carr Bettis. The lawsuit, which alleged stock manipulation and retaliation under New York Labor Law, was dismissed with prejudice, preventing refiling. The plaintiff also voluntarily abandoned defamation and tortious interference claims.

The company had previously filed its own lawsuit against Kovacs in Florida in April 2024 for defamation and other causes. According to AudioEye's complaint, Kovacs was terminated for cause after displaying irrational behavior and making threats to initiate a 'short and distort' scheme against the company's stock. Kovacs' motion to dismiss AudioEye's Florida lawsuit was denied, and the company continues to pursue its claims.

Positive

• Legal victory with complete dismissal of lawsuit against company and executives
• Company's counter-lawsuit against former employee proceeding in Florida court

Negative

• Ongoing legal proceedings in Florida may incur continued legal expenses

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Court dismisses lawsuit with prejudice, finding claims brought by David J. Kovacs to be without merit

TUCSON, Ariz., Feb. 4, 2025 /PRNewswire/ -- AudioEye, Inc. (Nasdaq: AEYE) ("AudioEye" or the "Company"), the industry-leading digital accessibility company, today announced that the Supreme Court of the State of New York has dismissed in full the lawsuit brought by former employee David J. Kovacs against the Company, CEO David Moradi, and Chairman of the Board Carr Bettis.

The lawsuit, which included claims of stock manipulation and retaliation under New York Labor Law and intentional infliction of emotional distress, was dismissed with prejudice, meaning the claims cannot be refiled. Additionally, the plaintiff voluntarily abandoned claims of defamation and tortious interference before the Court's ruling.

"We are pleased with the Court's decision to dismiss this baseless lawsuit in its entirety," said David Moradi, CEO of AudioEye. "It was clear from the start that these claims were brought forward by a disgruntled former employee with personal motives that had nothing to do with the facts. The Court's ruling reaffirms what we have known—these claims had no merit."

Pattern of Misconduct and Erratic Behavior

AudioEye had previously filed a lawsuit in Florida against David J. Kovacs in April 2024, suing for defamation and other causes of action. AudioEye's complaint states, "after discovering [Mr. Kovacs] was exhibiting a pattern of irrational, erratic, and manipulative behavior while maligning and defaming AudioEye and its executives, AudioEye terminated him for cause. By this time, AudioEye also had come to learn that Kovacs was a fraud and had consistently misrepresented his accomplishments and experience. Additionally, Kovacs threatened to initiate a short and distort scheme against AudioEye and its stock, in which he would enlist powerful Wall Street investors to make false statements about the Company, which would drive the stock to zero."

Mr. Kovacs moved to dismiss AudioEye's action against him in Florida, but the Court denied his motion. AudioEye is continuing to pursue its claims.

About AudioEye
AudioEye exists to ensure the digital future we build is accessible. The gold standard for digital accessibility, AudioEye's comprehensive solution combines industry-leading AI automation technology with expert fixes informed by the disability community. This powerful combination delivers industry-leading protection, ensuring businesses of all sizes — including over 126,000 customers like Samsung, Calvin Klein, and Samsonite — meet and exceed compliance standards. With 23 US patents, AudioEye's solution includes 24/7 accessibility monitoring, automated WCAG issue testing and fixes, expert testing, developer tools, and legal protection, empowering organizations to confidently create accessible digital experiences for all.

Media Contact
Sierra Thomas
AudioEye PR
sierra.thomas@audioeye.com 

Investor Contact
Tom Colton
Gateway Group, Inc.
AEYE@gateway-grp.com
949-574-3860

 

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SOURCE AudioEye, Inc.

FAQ

What was the outcome of the lawsuit against AudioEye (AEYE) and its CEO in New York?

The Supreme Court of New York dismissed the entire lawsuit with prejudice, finding the claims brought by former employee David J. Kovacs to be without merit.

What were the main allegations in the dismissed lawsuit against AudioEye (AEYE)?

The lawsuit included claims of stock manipulation, retaliation under New York Labor Law, and intentional infliction of emotional distress. Claims of defamation and tortious interference were voluntarily abandoned.

What legal action has AudioEye (AEYE) taken against former employee David Kovacs?

AudioEye filed a lawsuit against Kovacs in Florida in April 2024 for defamation and other causes of action, which is still ongoing after Kovacs' motion to dismiss was denied.

What allegations did AudioEye (AEYE) make against David Kovacs in their Florida lawsuit?

AudioEye alleged that Kovacs exhibited irrational behavior, made misrepresentations about his experience, and threatened to initiate a 'short and distort' scheme against the company's stock.