SEC Probes Whether SoftBank-Backed Messaging App Misled Investors

The Securities and Exchange Commission has been investigating whether SoftBank-backed messaging app IRL violated securities laws, including in the way the startup described its business performance during talks with investors, according to people with knowledge of the situation.

The SEC investigation began after The Information reported in May that some IRL employees had expressed concern to managers about the company’s public claim that its app had around 20 million active users, these people said. Abraham Shafi, CEO of the $1 billion-valuation startup, has stood by that figure. IRL app users can chat about shared interests, such as music and sports, and plan real-world events around them. (IRL stands for “in real life.”)