(Reuters) – The founder and former chief executive of Jumio Inc will pay $17.4 million to settle U.S. Securities and Exchange Commission charges of defrauding investors in the mobile payments and verification startup of identity before its bankruptcy, the regulator announced on Tuesday.
Daniel Mattes has been accused of overstating the Palo Alto, Calif.-based company’s revenue more than tenfold, earning $14.6 million by selling its shares from April 2014 to February 2015, hiding the sales from directors of Jumio and falsely telling Jumio’s lawyers that the administrators had approved the Sales.
Mattes, 46, who lives in Wels, Austria, also told at least one investor that he was not selling his shares because there were “a lot of good things to come” in the private company and “there would be foolish to sell that much,” the SEC said.
The SEC said Mattes agreed to return $16.76 million, including interest, and pay a civil penalty of $640,000.
Former CFO Chad Starkey will pay $421,000 to settle SEC charges related to Jumio’s finances and Mattes’ stock sales.
Neither Mattes nor Starkey admitted or denied wrongdoing.
“Corporate executives must provide investors with accurate information whether their companies are publicly traded or not,” Erin Schneider, associate regional director at the SEC in San Francisco, said in a statement.
Jumio filed for Chapter 11 protection in March 2016, after restating its financial statements the previous September, and was acquired by venture capital firm Centana Growth Partners. Airbnb, Coinbase and WeWork are among current Jumio customers.
Mattes is now CEO of 42.cx, an artificial intelligence startup he founded and based in Vienna.
In a phone interview, Mattes said he was “a bit emotional about the whole thing” as he was no longer with Jumio, but wanted to “move on with my life” and agreed to settle down. .
“I created a market over the years, I grew the business,” Mattes said. “The business was worth a lot, then it was worth nothing, and now it’s thriving and even better than ever.”
A Starkey attorney did not immediately respond to a request for comment.
Reporting by Jonathan Stempel in New York; Editing by Leslie Adler
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