Zymergen To Pay $30 million SEC Settlement Over Misleading Investors

On Thursday, the U.S. Securities and Exchange Commission (SEC) charged renewable materials company Zymergen Inc with misleading investors about its technology and financial results. The company has since agreed to settle for $30 million, the SEC said. Zymergen neither admitted nor denied the SEC's allegations.

SEC's Allegations

The SEC alleges that Zymergen misled investors by making false and misleading statements about its technology in its IPO registration statement and other public filings. The company also failed to disclose that it was experiencing production problems and that its financial results were not as strong as it had led investors to believe, the SEC said.

Misleading Investors

The SEC's complaint alleges that Zymergen made a number of false and misleading statements about its technology, including:

• Claiming that its technology was able to produce a wide range of materials with superior properties to traditional materials.
• Claiming that its technology was scalable and could be used to produce materials at a commercial scale.
• Claiming that its technology had been validated by independent third parties.

The SEC also alleges that Zymergen failed to disclose that it was experiencing production problems and that its financial results were not as strong as it had led investors to believe. In particular, the SEC alleges that Zymergen:

• Failed to disclose that it was having difficulty scaling up its production process.
• Failed to disclose that its financial results were being hurt by the production problems.
• Failed to disclose that it was facing competition from other companies.

The Settlement

Zymergen has agreed to pay $30 million to settle the SEC's charges. The company will also be required to retain an independent consultant to review its public disclosures and its internal controls.

The settlement is a significant victory for the SEC. It sends a message to other companies that they will be held accountable for misleading investors. It also provides investors with some compensation for the losses they suffered as a result of Zymergen's misconduct.