(Hedgeco.Net) The Securities and Exchange Commission has charged a San Francisco-based e-commerce startup and its chief executive officer with misleading investors about purported contracts with well-known consumer brands.
According to the SEC’s complaint, from 2018 to 2020, Andrew J. Chapin, the founder and CEO of Benja Inc., told investors that Benja was a successful online advertising platform that generated millions of dollars in revenue from popular consumer clothing brands and retailers. In reality, as the complaint alleges, Benja never did business with the companies. The complaint further alleges that in order to secure investments, Chapin enlisted one or more associates to help induce investments from venture capital investors by impersonating representatives of Benja’s purported customers and the supposed founder of a venture capital fund who falsely claimed to have made a large investment in Benja. According to the complaint, Chapin also provided an investor with forged contracts and doctored bank statements.
“We allege that Chapin violated the federal securities laws by deceiving investors about the most fundamental aspects of Benja’s business by falsely portraying it as a successful e-commerce technology company that in a short period of time had generated significant revenue from several high-profile clients,” said Erin E. Schneider, Director of the San Francisco Regional Office. “We will continue to pursue companies and executives who mislead investors.”
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, charges Benja and Chapin with violating the antifraud provisions of the federal securities laws and seeks permanent injunctions, civil penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Chapin. In a parallel action, the U.S. Attorney’s Office for the Northern District of California today announced criminal charges against Chapin.