(HedgeCo.Net) The Securities and Exchange Commission has charged a San Francisco, California-based e-commerce start-up 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.
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 Section 17(a) of the Securities Act of 1933 and Section 10(b) and of the Securities Exchange Act of 1934 Rule 10b-5 thereunder, and seeks permanent injunctions, civil money penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Chapin.