The U.S. Securities and Exchange Commission charged two former Linqto, Inc. executives on October 9, alleging they defrauded thousands of retail investors who used the San Jose platform to buy exposure to pre-IPO “unicorn” companies. Between 2021 and 2024, a Linqto subsidiary sold more than $430 million of special purpose vehicles holding private-company interests to retail buyers, according to the SEC’s litigation release .
The complaint names founder William Sarris and former executive Joseph Endoso and adds a civil enforcement action to the regulatory fallout that has surrounded Linqto since its collapse.
False Pricing and Fake “Sold Out” Notices
The SEC alleges the two misled investors in several ways. It says they falsely indicated that Linqto’s prices reflected current or below-market conditions when nearly all offerings were actually priced above fair value, and represented securities as “sold out” or “fully subscribed” when additional shares remained available.
The complaint also alleges the executives claimed an algorithm automatically set platform prices that moved dynamically with investor demand, when Linqto personnel were in fact setting prices manually, and that they touted federal-securities-law compliance after their own counsel told them the business violated those rules.
Unregistered Sales to Unaccredited Investors
Alongside the misrepresentation claims, the SEC charges Sarris and Endoso with operating unregistered investment companies and selling securities in unregistered transactions to unaccredited investors through Linqto’s subsidiary. The charges span Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and aiding and abetting violations of the Investment Company Act.
The agency seeks injunctive relief, disgorgement with prejudgment interest, civil penalties, and officer and director bars against both men.
What the Case Adds to Linqto’s Collapse
The litigation release notes the SEC received assistance from the U.S. Attorney’s Office for the Southern District of New York and the FBI, a sign of parallel attention from criminal authorities. Linqto’s earlier troubles included Ripple severing ties with the platform amid a Department of Justice investigation.
The complaint is an enforcement step, not a finding of liability, and the allegations will be tested in the U.S. District Court for the Northern District of California. The case still sharpens regulators’ focus on platforms that marketed private-company shares to retail buyers, a theme that echoes recent enforcement actions against crypto founders .
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