uBiome Co-Founders Settle SEC Case for $125,000 Each, Face Three-Year Bars
SEC settlement would fine uBiome co-founders Jessica Richman and Zachary Apte $125,000 each and impose three-year officer and director bars if court approved.
Summary
The SEC filed consents and proposed final judgments on September 14, 2026, to settle its case against Jessica Richman and Zachary Apte, co-founders of uBiome Inc., a San Francisco private medical testing company that ceased operations in 2019. The March 18, 2021 complaint, Securities and Exchange Commission v. Jessica Richman and Zachary Apte, No. 3:21-cv-01911-CRB in the Northern District of California, alleged that CEO Richman and Chief Scientific Officer Apte raised investor funds by falsely portraying rapid growth supported by successful health insurance reimbursement for uBiome tests. The SEC alleged that reimbursements instead depended on inducing doctors to order unnecessary tests and other improper practices directed by the defendants, prompting insurers to reclaim prior payments after discovery.
Without admitting the allegations, Richman and Apte each agreed to a $125,000 penalty, permanent injunctions against violating Securities Act Section 17(a), Exchange Act Section 10(b), and Rule 10b-5, three-year officer and director bars, and three-year prohibitions on securities issuance, purchase, offers, or sales, except personal-account transactions. The proposed judgments require court approval. Thomas Eme and David Zhou conducted the litigation, supervised by Jason M. Bussey and Jason H. Lee of the SEC’s San Francisco Regional Office.
Positives
- Each defendant agreed to pay a $125,000 civil penalty, subject to court approval.
- Permanent injunctions would bar Richman and Apte from future violations of key federal antifraud provisions.
- Three-year officer and director bars would restrict both uBiome co-founders from corporate leadership roles.
- Three-year securities participation bans would cover issuance, purchases, offers, and sales, except personal-account transactions.
Risks & concerns
- The SEC alleged Richman and Apte raised investor funds using false claims about uBiome’s growth and insurance reimbursement record.
- The complaint alleged uBiome’s reimbursement success relied on inducing doctors to order unnecessary tests and other improper practices.
- Insurers allegedly reclaimed previous reimbursement payments after discovering uBiome’s practices.
- uBiome ceased operations in 2019, two years before the SEC filed its complaint.
- Richman and Apte did not admit the SEC’s allegations, and the proposed final judgments remain subject to court approval.