WASHINGTON: The US Securities and Exchange Commission (SEC) has charged San Francisco-based e-commerce startup Benja and its CEO with misleading investors about purported contracts with well-known consumer brands.
According to the SEC's complaint, Andrew J Chapin, the founder and CEO of Benja, told investors from 2018 till 2020 that Benja was a successful online advertising platform that generated millions of dollars in revenue from popular consumer clothing brands and retailers. In reality, Benja never did business with the companies.
One of the individuals involved in the scheme apparently also pretended to be a founder of a venture capital fund that made a "large" investment in the startup.
According to the complaint, Chapin also provided an investor with forged contracts and doctored bank statements. "Chapin violated the federal securities laws by deceiving investors about the most fundamental aspects of Benja's business by falsely portraying it as a successful e-commerce technology company that in a short period of time had generated significant revenue from several high-profile clients," said Erin E. Schneider, Director of the SEC's San Francisco Regional Office.
"We will continue to pursue companies and executives who mislead investors."
The SEC's complaint, filed in the US District Court for the Northern District of California, charged Benja and Chapin with violating the antifraud provisions of the federal securities laws and seeks permanent injunctions, civil penalties and disgorgement with prejudgment interest.
Forged contracts and bank statements that had been tampered with were also allegedly waved under venture capitalist investor noses to back up claims of $6.2 million in generated revenue in 2018 and $13.2 million in 2019. The US Attorney's Office for the Northern District of California has also filed criminal charges against Benja's CEO. The office is charging Chapin with bank fraud, wire fraud, and securities fraud. (IANS)