The U.S. Securities and Exchange Commission (SEC) charged machine-learning startup YouPlus with defrauding investors by making false statements about its revenue sources and finances. Founder and CEO Shaukat Shamim was also charged with fraud over alleged incidents that date back to 2018 and 2019.
- The Mountain View-based private company claims to have developed an A.I. and machine learning tool that could analyze online videos for consumer opinions.
- The SEC says Shamim falsely told investors YouPlus earned millions of dollars in revenue per year and had over 100 customers. He later admitted that YouPlus earned less than $500k and had only four paying customers.
- Shamim still managed to raise $17.5M in seed funding from about 50 investors from 2013-2019. Approximately $11M was raised fraudulently, the SEC claims.
- The U.S. Attorney’s office has also issued charges against Shamim, the former CEO of Buysight, which was acquired by AOL in 2012.