Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—N.D. Cal.: YouPlus, former CEO settle SEC fraud case over fundraising misstatements, (Jul 15, 2026)

By Rodney F. Tonkovic, J.D.

Silicon Valley startup and founder charged with overstating revenues, customer relationships, and business prospects to attract investors consent to antifraud injunctions.

The SEC filed consents and proposed final judgments that would settle an enforcement action against YouPlus, Inc. and its former CEO. Defendants YouPlus and Shaukat Shamim consented to final judgments resolving claims that they fraudulently raised over $11 million by overstating the company's revenues, customer relationships, and growth prospects. The settlements include permanent injunctions against future violations of the antifraud provisions, and Shamim also agreed to an officer-and-director bar and disgorgement (SEC v. YouPlus, Inc., No. 5:20-cv-04855 (N.D. Cal. filed July 20, 2020)).

Background. YouPlus, Inc. is a startup based in Silicon Valley that purports to have developed a machine-learning tool for marketers, researchers, and brand managers. Its former CEO and founder is Shaukat Shamim, a resident of Santa Clara, California.

In July 2020, the Commission charged YouPlus and Shamim with fraudulently raising $11 million from investors. According to the complaint, the defendants started to raise seed money to develop the machine-learning tool in 2013. In 2018, they allegedly misrepresented the company’s financial results and revenue prospects during an offer and sale of convertible promissory notes that raised $11 million.

The defendants continued to send false information about YouPlus's revenues, customer base, and fundraising prospects to prospective investors through 2019. The Commission says that Shamim falsely told investors that YouPlus earned millions of dollars in annual revenue and had more than 100 customers, including well-known Fortune 500 companies. In September 2019, however, Shamim was confronted by certain investors and admitted that YouPlus had barely $500,000 in sales and had only four paying customers through the company's existence.

The Commission sought permanent injunctions, civil penalties, disgorgement, and an officer-and-director bar.

Settled. Without admitting or denying the allegations, YouPlus and Shamim consented to the entry of proposed final judgments. YouPlus agreed to be permanently enjoined from violating Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Shamim agreed to a permanent injunction from violating the same antifraud provisions. He also agreed to an officer-and-director bar and to pay disgorgement of $847,401.46, plus prejudgment interest of $23,330.22; the disgorgement and interest will be deemed satisfied by the order of restitution entered against Shamim in a parallel criminal matter.

Criminal charges. A parallel criminal action against Shamim was also announced along with the SEC's action. In April 2025, Shamim was sentenced to 2.5 years in prison, having pleaded guilty to one count of securities fraud pursuant to a plea agreement. He was also ordered to pay a $50,000 fine and serve three years of supervised release after he leaves prison.

The case is No. 5:20-cv-04855.

Attorneys: Bernard B. Smyth, III for the SEC. Teela Crosthwaite Smith (Smith Shapourian Mignano PC) for YouPlus, Inc.

Companies: YouPlus, Inc.

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