Court dismisses lawsuit with prejudice, finding claims brought by David J. Kovacs to be without merit
TUCSON, Ariz., Feb. 4, 2025 -- 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.
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