Startup CEO stayed in role three months after fraud discovery
CaaStle’s board learned its chief executive had overstated revenue by hundreds of millions and kept her in place until March. Lawsuits now allege the board failed to act sooner and did not alert investors.
New York PostThe board of fashion tech startup CaaStle learned in spring 2025 that its chief executive had overstated the company’s revenue and kept her in the role for three additional months, according to court filings reported by the New York Times. Christine Hunsicker, co-founder and chief executive, pleaded guilty in March to securities fraud tied to a $283 million scheme.
The company had raised more than $600 million from investors and reached a $1.25 billion valuation in 2018.
Lawsuits target board oversight Multiple lawsuits filed by bankruptcy trustee George Miller allege the board, which had only three directors including Hunsicker, did not act on obvious discrepancies and delayed any public disclosure. One filing states Hunsicker admitted the fraud during a December 2024 video call with the remaining directors yet refused to resign unless another co-founder took her place.
Revenue gap detailed in audit An audit obtained by the New York Times showed CaaStle reported nearly $440 million in net revenue for fiscal 2023 to some investors while actual revenue was $15.7 million. The same documents indicate Hunsicker began circulating false financial statements in 2019.
Discrepancies went unnoticed by the board until late 2024. A spokesperson for co-founder Jaswinder Pal Singh said he rejoined the board to stabilize operations and provided uncompensated capital to meet payroll. Singh has not been charged with any crime.
Hunsicker founded Gwynnie Bee in 2011, rebranded it CaaStle in 2018, and signed platform deals with several apparel brands before the discrepancies surfaced.
