The SEC (Securities and Exchange Commission) on April 2, 2019 charged the founder a Silicon Valley startup with defrauding investors in Jumio Inc. a private mobile payments company.
Former CEO, Daniel Mattes, agreed to pay more than $17 million to settle the charges.
The SEC’s complaint which was filed in federal court in California alleged that Mattes overstated Jumio’s 2013 and 2014 revenues,. then sold shares he owned to unrelated investors.
Mattes allegedly made $14 million by selling his Jumio shares. The sales were not disclosed to Jumio’s Board of Directors. In the process, Mattes allegedly lied tp investors claiming “he didn’t want” to his own shares and “he’d be stupid to sell at this point.”
Jumio’s shares became worthless after it filed for bankruptcy in 2016 after earnings were restated downward.
An SEC spokesman stated “Mattes enriched himself at investors’ expense by making false claims about Jumio’s financial results,” “Company executives must provide investors with accurate information irrespective of whether their companies are publicly or privately traded.”
Another Jumio investor, CFO Chad Starkey, was also accused for failing to exercise reasonable care concerning Jumio’s financial statements and related acts. Starkey entered into a cooperation agreement to assist the SEC. Starkey, will pay approximately $420,000 in disgorgement and prejudgment interest.
Without admitting or denying the allegations, Mattes, an Austrian citizen who now heads a private Austria-based company, has agreed to be enjoined from future similar violations and barred from being an officer or director of a publicly traded company in the U.S. Mattes will pay more than $16 million in disgorgement and prejudgment interest plus a $640,000 penalty.
Anthony M. Abraham, Esq., PC is experienced in broker fraud, churning and unauthorized trading claims. If you suspect that your account has been churned, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@Abrahamattorneys.com.