The US Securities and Exchange Commission (SEC) announced Monday that it had reached proposed settlements with Silicon Valley start-up YouPlus and founder and former chief executive Shaukat Shamim in California.
According to the SEC’s litigation release, consents and proposed final judgments were filed Friday in the Northern District of California. They remain subject to court approval.
YouPlus consented to a permanent injunction covering Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act, including Rule 10b-5, without admitting the complaint’s allegations.
Shamim consented to the same injunction and an officer-and-director bar. The proposed judgment also orders disgorgement of $847,401.46 plus $23,330.22 in prejudgment interest.
The SEC said those amounts will be treated as satisfied by a restitution order entered against Shamim in the parallel criminal case, United States v. Shamim.
The agency’s 2020 complaint said the defendants obtained about $11 million from roughly 30 investors in 2018 and 2019 by overstating revenue and customer counts. According to the filing, Shamim said YouPlus generated millions of dollars a year and had over 100 customers, Fortune 500 firms among them.
The SEC said YouPlus had earned less than $500,000 and secured four paying customers since its 2013 founding. The civil case was filed on July 20, 2020.
