back to article SEC drags Silicon Valley AI upstart to court over claims of made-up revenues, investors swindled out of $11m

America's financial watchdog has taken a Silicon Valley AI startup and its CEO to court for allegedly swindling $11m from investors by forging fake bank statements to lie about its revenues. YouPlus, based in Mountain View, California, bragged it had developed machine-learning software that could analyze videos to …

  1. Jimmy2Cows Silver badge

    Due diligence is more than just "show me some bank statements"

    Yeah, it's fraud, but it seems like there wasn't enough DD from investors who got mugged off.

    Faking a bank statement would be almost trivial these days, so shouldn't enough to tick the DD box. But the banks aren't going to just hand over confidential account information, balances, deposits etc. to just anyone who asks, so how does one verify?

    I still think the investors should have dug a bit deeper, instead of seeing a unicorn and going through 3 (three!!) funding rounds before pulling the plug.

    1. You aint sin me, roit Silver badge

      Re: Due diligence is more than just "show me some bank statements"

      They like to sprinkle cash around... some might sink, some pay out big time.

      Due diligence takes too long, and in any case these wizzy venture capitalists are geniuses, they know better than mere mortals. They must do because they are rich.

      But for genius read moron, because it should be cause for concern when a company that is a runaway success, pulling in vast revenues, needs a hand out to meet payroll expenses...

  2. rcxb Silver badge

    He also concocted two financial models; one said YouPlus had made $3.55m from January to April 2019, and another reported $3.97m for the same time period, we're told.

    Ah, yes... It's a multi-dimensional quantum-entangled startup. They're simultaneously doing both depending on which timeline you end up in. The uncertainty principle in effect. Nobody lives or dies until they open the box.

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