What do you do if your boss lied to a client?

Our company had a group meeting with a client about a product we have. The client asked a specific question about our product and our boss told them "yes it does that", knowing full well that the functionality didn't exist. I called him out on it later in private, and he defended himself, but it never sat right with me. People say fake it till you make it, but is that really what it means...