The Securities and Exchange Commission (SEC) has charged Shaukat Shamin, founder and CEO of YouPlus, with defrauding his investors by misrepresenting the company’s financial condition.
Shamin, founder of the Mountain View-based startup is accused by the SEC of raising millions of dollars in funding by committing fraud. He also made false statement regarding the number of customers YouPlus already had and that they had a commitment from a prominent venture capital firm for their Series A round of financing.
SEC and criminal charges being filed
“As we allege in our complaint, Shamim and YouPlus drummed up interest in the company by providing false information about its financial performance and customer base,” said Erin E. Schneider, director of the SEC’s San Francisco regional office. “Private companies engaged in early-stage fundraising must tell the truth when selling securities to investors.”
The SEC’s complaint was filed in the U.S. District Court for the Northern District of California. YouPlus and Shamim are charged with violations of anti-fraud provisions of the federal securities laws. The SEC seeks permanent injunctions, civil money penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Shamim.