NEW YORK, April 9 (Reuters) - The Securities and Exchange Commission settled fraud charges on Monday against a Silicon Valley entrepreneur who raised millions for his two start-up companies by making false promises to investors.
The SEC complaint, filed against Benedict Van in federal court in the Northern District of California, accused the entrepreneur of "serial misrepresentation" to largely inexperienced investors.
"Van played on the hopes of investors, tricking them into believing that his companies were on the verge of becoming the next Silicon Valley success stories," Marc Fagel, director of the SEC's San Francisco regional office, said in a press release.
According to the complaint Van told potential investors that his two internet companies, hereUare and ecity, were soon to go public. He also said that Goldman Sacs was preparing the filings for hereUare's I.P.O. In reality, there was no plan for either company to go public and Goldman Sacs had no relationship to hereUare.
Van extracted $6.2 million from investors for hereUare, which he pitched as "the next Google" claiming that its search engine was "three times more powerful" than Google's engine.
Van, hereUare and ecity agreed to settle the charges without admitting or denying the allegations, and Van agreed to a permanent bar on him serving as an officer or director in a public company. The SEC agreed to waive any financial charges against Van based on his inability to pay.
The case is SEC v Benedict Van et al, U.S. District Court, Northern District of California, no. 12-1743.
(Reporting by Rebecca Hamilton)
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