China-based Luckin Coffee Inc. has agreed to pay a $180 million penalty to settle charges from the Securities and Exchange Commission that it defrauded investors by materially misstating its financials.

The SEC’s complaint says that, from April 2019 through January 2020, Luckin made up more than $300 million in fake retail sales, and that some of the company’s employees tried to conceal the fraud by inflating its expenses by more than $190 million, including creating a fake operations database, and altering accounting and bank records.

The commission also alleges that the company “intentionally and materially overstated its reported revenue and expenses and materially understated its net loss in its publicly disclosed financial statements in 2019.” For instance, the SEC complaint says the company overstated reported revenue by 28 percent for the period ending June 30, 2019, and by 45 percent for the period ending Sept. 30, 2019 – all while raising more than $864 million from investors.

“The SEC’s complaint alleges that Luckin’s disclosures to investors about its revenues were false,” said Carolyn Welshhans, associate director of the SEC’s Division of Enforcement, in a statement. “The settlement with Luckin is designed to help ensure that harmed investors have the best available opportunity to receive relief.”

The misconduct at the company was discovered during its annual audit, and in response Luckin reported it to the SEC, initiated an internal investigation, fired some employees, and added internal accounting controls.

The company neither admitted nor denied the allegations in the SEC’s complaint.

The SEC’s investigation is ongoing.