SEC fines Jumio founder Mattes $17 million for fraud

The Securities and Exchange Commission fined former Jumio Inc. founder and CEO, Daniel Mattes more than $17 million on Tuesday to settle the charges he defrauded investors in the private mobile payments company.

The SEC alleged Mattes grossly overstated Jumio’s 2013 and 2014 revenues and then sold shares he held personally to investors in the private, secondary market. Mattes made approximately $14 million by selling his Jumio shares, the SEC said. He hid these sales from Jumio’s board and also falsely told an investor that he didn’t want to sell any of his shares because there was “lots of great stuff coming up,” and that “he’d be stupid to sell at this point,” according to the SEC’s complaint.

Jumio restated its financial results in 2015, wiping out most of its revenue, and the shares became worthless after it filed for bankruptcy in 2016. Mattes, an Austrian citizen who now heads a private Austria-based company, neither admitted nor denied the allegations but agreed to be barred from being an officer or director of a publicly traded company in the U.S..

The SEC settled a separate proceeding against Jumio’s former CFO Chad Starkey for failing to exercise reasonable care concerning Jumio’s financial statements and signing stock transfer agreements that falsely implied that Jumio’s board of directors had approved Mattes’ sales. Starkey cooperated with the SEC’s investigation and agreed to pay approximately $420,000.

Market Watch | April 2, 2019