The Securities and Exchange Commission today charged Sientra, Inc., a California-based medical aesthetics company, and its former CEO, Hani Zeini, with concealing damaging news about the company's sole-source manufacturer before it closed a $60 million stock offering in 2015. The company agreed to settle the SEC's charges.

According to the SEC's complaint, Sientra sells silicone breast implants in the United States, and at the time of the offering, all of the implants it sold were made by a company in Brazil. Three days before Sientra was preparing to close a stock offering for more than $60 million, Zeini allegedly learned from the Brazilian company's CEO that its Brazilian manufacturer's "CE certificate," which is a sign of regulatory compliance required to sell products in the European Union, had been suspended. Zeini allegedly concealed this information from Sientra's general counsel and the underwriters for the offering. The day after the offering closed, news of the suspension became public, and Sientra's stock price fell 52.6% from $20.58 to $9.70 per share after it issued a release disclosing the suspension. Even after that, Zeini allegedly lied to those asking about the matter, and tried to destroy the records that showed he knew about the CE certificate suspension.

The SEC's complaint, filed in U.S. District Court for the Central District of California, charges Hani Zeini with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks a penalty, an officer and director bar, and a permanent injunction.

Without admitting or denying the findings, Sientra, consented to the entry of the SEC's order, which finds Sientra violated Section 17(a) of the Securities Act of 1933 and section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and orders Sientra to cease and desist from future violations of these statutes. In considering whether to accept Sientra's settlement the SEC considered Sientra's prompt action upon discovering the alleged fraud, self-reporting to the SEC, and extensive cooperation with the agency's investigation.

The SEC's investigation was conducted by Matthew Montgomery and was supervised by Robert Conrrad of the Los Angeles office. The SEC's litigation against Mr. Zeini will be handled by Amy Longo and Matthew Montgomery.