Manish Lachwani, the former CEO and founder of Silicon Valley-based start-up HeadSpin has pleaded guilty to securities fraud after overstating the company’s revenue to investors, according to a press release by the US Attorney’s Office. Lachwani, an Indian-origin entrepreneur, was arrested in August 2021 and charged with defrauding investors to the tune of $80 million (around Rs 654 crore). He founded HeadSpin in 2015 and served as its CEO until May 2020, providing clients with software tools and access to devices to test mobile applications.
HeadSpin raised more than $100m from investors over multiple rounds of fundraising between April 2017 and April 2020, leading to a valuation of approximately $ 1.1 billion. However, Lachwani has now admitted to disseminating false and overstated revenue metrics to potential investors to lure investments into his company. He acknowledged providing investors with overstated revenue and inflated annual recurring revenue numbers, which are significant to investors and their decisions on whether to invest in the start-up.
The wire and securities fraud charges carry maximum penalties of 20 years in prison and fines of up to $250,000 and $5m, respectively, according to the press release. In addition to any potential prison sentence, Lachwani could be compelled to pay supplementary fines and serve an extra term of supervised release. US District Judge Breyer has scheduled Lachwani’s sentencing hearing for September 27, 2023.
Prior to starting HeadSpin, Manish Lachwani played a significant role in developing the initial operating system for the Amazon Kindle tablet. He then contributed to the creation of Appurify, a mobile testing platform that Google acquired in 2014.
Also Read
Instagram revamps Reels with new video editing and discovery features
Europe sets up task force on ChatGPT to create a common policy on AI privacy rules
Source link