Saverin, Others Face Suit over Jumio Bankruptcy

An investment firm has filed suit in a Delaware court against directors and officers of authentication startup Jumio, which filed for bankruptcy in March. The action by Bloso Investments, a firm based in the British Virgin Islands, includes former CEO Daniel Mattes and Facebook co-founder Eduardo Saverin as defendants. The complaint alleges that after the company was accused of financial irregularities, the Jumio board of directors and officers “immediately took action to engineer Jumio’s bankruptcy, coordinate the repurchase of Jumio at below fair market value, and to secure complete liability releases related to the pre-petition actions which damaged Bloso.” Attorneys for the plaintiff said the action resulted in the complete loss of its $5 million investment in the company, which developed technology that enabled document verification using the camera of a smartphone.

Late last year, Jumio was forced to restate its 2013 and 2014 earnings after it was accused of financial irregularities (one of which, according to the lawsuit, was Jumio’s accounting as revenue of 100 percent of the value of every transaction its technology verified, rather than just the fraction of the value Jumio was charging as its fee). Despite the ongoing Chapter 11 proceedings and the current lawsuit on behalf of Bloso, Jumio was purchased out of bankruptcy in a court-supervised auction for $850,000 by Centana Growth Partners, which outbid Saverin. According to reports, the new Jumio has raised $15 million between Centana and Millennium Value Technology Partners. Bloso’s entire complaint, filed in Delaware Chancery Court where Jumio was officially headquartered, can be read here.