(HedgeCo.Net) The Securities and Exchange Commission today charged a Mountain View, California technology start-up and its chief executive officer with defrauding investors of approximately $11 million by making false and misleading statements about the company’s finances and sources of revenue.

The SEC’s complaint alleges that, between 2018 and 2019, Shaukat Shamim, the founder and CEO of YouPlus, a private company that purported to have developed a machine-learning tool to analyze videos on the internet, raised funds from investors while repeatedly misrepresenting the company’s financial condition. According to the complaint, Shamim falsely told investors that YouPlus earned millions of dollars in annual revenue and had more than 100 customers, including Fortune 500 companies. When one investor pressed Shamim for information substantiating those claims, Shamim allegedly provided the investor with falsified bank statements in an effort to conceal the fraud. The scheme allegedly unraveled in late 2019 when Shamim confessed to certain investors that YouPlus had in fact earned less than $500,000 and obtained only four paying customers from the company’s inception in 2013.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges YouPlus and Shamim with violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) and Rule 10b-5 thereunder of the Securities Exchange Act of 1934 (“Exchange Act”), and seeks permanent injunctions, civil money penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Shamim.