Facebook Co-Founder among Targets in Jumio Lawsuit
A shareholder of ID verification startup Jumio Inc. has sued company officials over alleged mismanagement and misrepresentation of the firm, which filed for bankruptcy in March 2016. In a lawsuit filed in Delaware, Bloso Investments Ltd., alleges that Jumio directors, including Facebook co-founder Eduardo Saverin, made deliberately misleading statements about the company’s prospects, duping Bloso into investing $5 million in Jumio. Headquartered in the British Virgin Islands, Bloso was one of the largest Jumio shareholders, owning more than 3.9 million shares when the company declared bankruptcy earlier this year.
The lawsuit alleges Jumio used improper accounting practices that projected the company would earn $100 million in revenue in 2012. According to Bloso, Jumio arrived at that figure by counting as revenue the total volume of credit card purchases verified by Jumio’s technology, rather than the 2 percent fee the company actually earned on each transaction.
In a statement to the Wall Street Journal, a spokeswoman for Saverin called the allegations “baseless” and noted that Saverin “was harmed as much as, if not more than, any other investor of the company by former management’s actions and is contemplating his own claims against them,” she said, according to the Journal. Saverin joined with venture capital firm Andreessen Horowitz in 2015 to invest $15.5 million into Jumio. He also is one of the company’s largest creditors, currently owed about $16 million. In May 2016, he attempted to purchase the company out of bankruptcy, but was outbid by Centana Growth Partners, which acquired Jumio for $850,000.