The Securities and Exchange Commission (SEC) today announced that it charged Christine Hunsicker, the co-founder, Chief Executive Officer, and Chair of CaaStle, Inc., formerly Gwynnie Bee, Inc., with creating and disseminating false financial statements and audit reports to investors while raising more than $250 million for CaaStle.

CaaStle, a private company, is a business-to-business technology and logistics company that enables apparel brands and retailers to offer customers subscription-based rentals of apparel, the complaint alleges.

According to the SEC’s complaint, Hunsicker created and provided false financial reports to existing and prospective investors from at least February 2019 through at least March 2025. Over that period, according to the complaint, the discrepancy between Hunsicker’s misstated financial results and the company’s actual results continued to grow in magnitude year-over-year, culminating in false financial statements that overstated revenues by more than 7,300%.

Hunsicker allegedly misled investors that CaaStle became profitable by December 2022 and experienced exponential increases in profitability after that, even though the company’s losses were increasing, and the company was never profitable. In addition, Hunsicker allegedly provided investors with doctored audit reports, purportedly from an independent outside audit firm.

The complaint further alleges Hunsicker misled investors into believing they were purchasing shares in secondary transactions from earlier investors. In reality, as alleged in the complaint, these investors were purchasing original issue shares directly from the company, and investor interests were diluted as a result. Hunsicker also allegedly created and distributed false capitalization tables that omitted the new share issuances and made it appear that outstanding share levels remained flat.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Hunsicker with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief, including a conduct-based injunction, an officer-and-director bar, disgorgement of ill-gotten gains and prejudgment interest, and a civil penalty.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York (USAO) today announced criminal charges against Hunsicker.