Former CEO at tech startup pleads guilty to falsifying revenue to fool investors
SAN FRANCISCO - The former CEO of a Sunnyvale-based tech startup pleaded guilty in a San Francisco federal court Thursday to charges related to defrauding investors.
Manish Lachwani, 47, pleaded guilty to wire fraud and securities fraud in connection with his efforts to inflate the value of the company he founded, Headspin, Inc., which bills itself as a software testing service on its website.
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Lachwani overstated the value of the company based on misrepresentations to investors about how many recurring subscribers the company had and how much revenue they generated by creating false invoices and disseminating fake revenue spreadsheets, according to the U.S. Department of Justice.
The company raised more than $100 million during two rounds of funding in 2018 and 2019, leading to a market valuation of $1.1 billion.
A sentencing hearing is scheduled for Sept. 27.