Oct 26, 2017

SEC fines HR software startup Zenefits

The SEC has issued an order fining HR software company Zenefits and its former co-founder and CEO, Parker Conrad, for not complying with certain regulations and making false and misleading statements to investors. The revelations of Zenefits' lack of compliance led to Conrad's ouster in early 2016. In total, they'll have to pay over $980,000.

Why it matters: This is the first tech industry "unicorn" — a private company valued at over $1 billion — that the SEC has gone after in this way. The commission did hint last year that it would be watching Silicon Valley much more closely.

"This settlement closes the chapter on a journey we began 18 months ago to transform Zenefits through new values and leadership," said Josh Stein, General Counsel at Zenefits, in a statement.

"I'm pleased to have reached an agreement with the SEC regarding Zenefits, and I'm incredibly proud of what we built there and grateful to have worked with such a talented group of people," said Conrad, who now runs a new startup, in a statement sent to Axios.

The story has been updated with a statement from Parker Conrad.

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