The Securities and Exchange Commission, which polices bad behavior by publicly traded companies, has for the first time taken action against a privately held Silicon Valley "unicorn" startup for misleading its investors, according to a release on Thursday.

The human resources startup Zenefits and its co-founder Parker Conrad have agreed to pay a combined $980,000 to settle accusations by the SEC that they made "materially false and misleading statements and omissions" to investors over their compliance with state insurance laws, the agency said.

The settlements, following separate deals with insurance regulators from 49 states and the District of Columbia, help Zenefits and Conrad conclude a nearly two-year legal cleanup that started after a BuzzFeed News report in November 2015.

Joshua Stein, Zenefits' general counsel, said in an emailed statement: "This settlement closes the chapter on a journey we began 18 months ago to transform Zenefits through new values and leadership. We are pleased that the SEC clearly acknowledged our cooperation, our extraordinary remedial efforts, and our commitment to compliance."

Conrad, in a statement emailed by a spokesperson, said: "I’m pleased to have reached an agreement with the SEC regarding Zenefits, and I’m incredibly proud of what we built there and grateful to have worked with such a talented group of people."

For the broader startup world, the Zenefits case is a clear sign that the SEC sees itself as a new cop on the Silicon Valley beat. Such an enforcement action by the agency against a prominent privately held startup appears to be unprecedented.

The SEC has relatively limited authority in the world of private companies; by law, it can only really police misrepresentations and fraud in the sale of private company stock. Historically, part of the reason the SEC has left startups alone is that investors in such companies are considered both wealthy and "sophisticated," meaning they understand the risks and can take care of themselves. It's when a company goes public, this thinking goes, that it can pull a fast one on naive investors.

Zenefits and Conrad did not admit or deny the SEC's findings, according to the agency. The company agreed to pay $450,000 to the SEC — a small penalty compared with the over half a billion dollars it has raised. Conrad agreed to pay nearly $534,000, of which $160,000 is a penalty and $350,000 represents the disgorgement of ill-gotten gains.

Zenefits has separately agreed to pay over $11 million in penalties to state regulators, and — in deal with its investors last year — it agreed to reduce its valuation to $2 billion from $4.5 billion.

