Daniel Mattes, the former CEO of Jumio Inc, agreed to pay $17 million to the SEC to settle fraud charges.
Jumio, an online identity verification company, was acquired in May 2016 by Centana Growth Partners, a New York growth firm, after the company filed for Chapter 11 bankruptcy protection. Benjamin Cukier, a Centana co-founder and partner, told Buyouts via email that Centana invested in Jumio after the company severed ties with Mattes and former Jumio Inc CFO Chad Starkey.
“Mattes and Starkey have not been involved with the successor company, Jumio Corp, in any capacity, and the announced charges and subsequent settlement did not involve Jumio Corp in any way,” Cukier said via email.
The SEC alleged in a complaint filed April 2 in California federal court that Mattes defrauded investors when he “grossly overstated” Jumio’s 2013 and 2014 revenues and then sold shares he owned in the company in the private, secondary market. Mattes allegedly made about $14 million from selling the shares, the SEC said.
Mattes also lied to an investor when he said he didn’t want to sell any Jumio shares because there was “lots of great stuff coming up” and “he’d be stupid to sell at this point,” the complaint alleges.
Mattes, an Austrian citizen, is barred from becoming an officer or director of a publicly traded company in the U.S. and has agreed to pay more than $16 million in disgorgement and prejudgment interest plus a $640,000 penalty, the SEC said.
In settling with the SEC, Mattes did not admit or deny the charges brought by the commission.
Separately, the SEC settled a proceeding against Starkey for allegedly failing to exercise reasonable care concerning Jumio’s financial statements and for signing a stock transfer agreement that falsely implied Jumio’s board had approved Mattes’ sale of shares. Starkey, who also sold Jumio shares in 2014, cooperated with the SEC. He has agreed to pay $420,000 in disgorgement and prejudgment interest. Starkey did not admit or deny the SEC charges, according to the settlement order.
The settlements come roughly three years since Jumio filed for Chapter 11 in March 2016. The company sought bankruptcy protection after government investigations into alleged accounting irregularities at the company made it difficult for it to raise funding, Buyouts previously reported. Jumio ousted Mattes in 2015 due to the investigations. Stephen Stuut, former chief executive of TruePosition, was named Jumio’s CEO in June of that year.
Centana bought Jumio Inc out of bankruptcy in May 2016 and renamed it Jumio Corp. The deal was reportedly valued at $900,000. Three months after the acquisition, Jumio collected $15 million in funding from Centana and Millennium Technology Value Partners.
Jumio has been under new management since 2016 and has proven itself as the clear leader in the identity-as-a-service market, Cukier said. “We’re proud to continue to support Jumio Corp and its team,” he said via email.
Centana put Jumio up for sale in 2018, seeking offers of $500 million, Buyouts has reported. The process apparently didn’t produce a buyer. Jumio is still listed as a Centana portfolio company.
A Jumio executive could not immediately be reached for comment.
Action Item: Download the SEC complaint against Mattes: SEC vs Daniel Mattes.