2020-01-01 SEC Press press_release 61 KB 2,377 chars

SEC Charges E-Commerce Startup and CEO With Defrauding Investors

Release
2020-291
Caption
Securities and Exchange Commission v. Benja Inc., et al.
Source JSON
summary

Andrew J. Chapin, CEO of San Francisco-based e-commerce startup Benja Inc., defrauded investors by falsely claiming lucrative contracts with major brands and generating millions in revenue, using forged documents and impersonations to secure funding, leading to SEC civil charges and parallel criminal prosecution.

paragraph

The SEC charged Benja Inc. and its CEO Andrew J. Chapin with violating federal antifraud securities laws by fabricating contracts with well-known consumer brands and inflating revenue figures from 2018 to 2020. Chapin allegedly deceived investors by providing forged contracts, doctored bank statements, and enlisting associates to impersonate executives of purported clients and a fake venture capital fund. The SEC seeks permanent injunctions, civil penalties, disgorgement with prejudgment interest, and an officer-and-director bar against Chapin, while the U.S. Attorney’s Office has filed parallel criminal charges.

narrative

Andrew J. Chapin, founder and CEO of San Francisco-based e-commerce startup Benja Inc., orchestrated a multi-year securities fraud from 2018 to 2020 by falsely representing the company as a successful online advertising platform with millions in revenue from major consumer brands. In reality, Benja had no business relationships with any of the cited companies, and Chapin used forged contracts, doctored bank statements, and accomplices posing as executives of those brands and a fictional venture capital fund to mislead investors. The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, alleges Chapin violated federal antifraud provisions and seeks permanent injunctions, civil penalties, disgorgement with prejudgment interest, and a bar from serving as an officer or director. In a parallel action, the U.S. Attorney’s Office for the Northern District of California has brought criminal charges against Chapin. The investigation, led by the SEC’s San Francisco Regional Office with assistance from the FBI and the U.S. Attorney’s Office, remains ongoing. Chapin’s deceptive practices targeted venture capital investors, exploiting their trust in high-growth tech startups to raise substantial funds under false pretenses. The case underscores regulatory vigilance against fraudulent representations in the startup investment ecosystem.

Enriched metadata

Scheme
pre-ipo-fraud (95%)
Court
Northern District of California
Classified pre-ipo-fraud(confidence 95%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →
Statutes
15 U.S.C. § 77q(a)
Parties
Securities and Exchange CommissionBenja Inc.Andrew J. Chapin
Keywords
chapininvestorsbenjae-commerce startupbenja chapinnorthern californiae-commercedefrauding investorsinvestors aboutventure capitalfederal securitiessecurities lawsfrancisco regionalagainst chapinattorney's northern

Extracted insights

Entities 16
  • person andrew j. chapin
  • company benja inc.
  • person erin e. schneider
  • person fraud period
  • person marc katz
  • person matthew meyerhofer
  • person monique c. winkler
  • person san francisco
  • agency sec complaint
  • agency sec's investigation
  • agency sec's investigation into benja and chapin
  • agency Securities and Exchange Commission
  • person susan lamarca
  • person Tracy L. Davis
  • agency u.s. attorney's office for the northern district of california
  • court u.s. district court for the northern district of california
Triples 17
  • SEC charged Benja Inc. and Andrew J. Chapin with misleading investors
  • Andrew J. Chapin is founder and CEO of Benja Inc.
  • Andrew J. Chapin told investors Benja generated millions of dollars in revenue from consumer brands
  • Benja Inc. never did business with purported consumer brands and retailers
  • Andrew J. Chapin provided investor with forged contracts and doctored bank statements
  • Andrew J. Chapin violated federal securities laws by deceiving investors
  • SEC seeks against Chapin permanent injunctions, civil penalties, disgorgement, and officer-and-director bar
  • U.S. Attorney's Office for the Northern District of California announced criminal charges against Andrew J. Chapin
  • Matthew Meyerhofer conducted SEC's investigation into Benja and Chapin
  • Erin E. Schneider is Director of San Francisco Regional Office
  • Tracy L. Davis supervised SEC's investigation
  • Monique C. Winkler supervised SEC's investigation
  • Susan LaMarca leading litigation against Benja Inc. and Andrew J. Chapin
  • Marc Katz leading litigation against Benja Inc. and Andrew J. Chapin
  • Fraud period occurred from 2018 to 2020
  • Benja Inc. is based in San Francisco
  • SEC complaint filed in U.S. District Court for the Northern District of California
View original SEC press releasesec.gov
Extracted body text (2,377c) 
The Securities and Exchange Commission today 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. The SEC's investigation, which is continuing, is being conducted by Matthew Meyerhofer, and supervised by Tracy L. Davis and Monique C. Winkler of the San Francisco Regional Office. The litigation against Benja and Chapin will be led by Mr. Meyerhofer, Susan LaMarca, and Marc Katz. The SEC appreciates the assistance of the U.S. Attorney's Office for the Northern District of California and the Federal Bureau of Investigation.
OCR text (2,377c · html-text · 99% conf) 
The Securities and Exchange Commission today 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. The SEC's investigation, which is continuing, is being conducted by Matthew Meyerhofer, and supervised by Tracy L. Davis and Monique C. Winkler of the San Francisco Regional Office. The litigation against Benja and Chapin will be led by Mr. Meyerhofer, Susan LaMarca, and Marc Katz. The SEC appreciates the assistance of the U.S. Attorney's Office for the Northern District of California and the Federal Bureau of Investigation.