The Securities and Exchange Commission has filed a civil complaint against the two top executives of Linqto, Inc., a now-bankrupt platform that sold shares of private companies to retail investors. The regulator alleges that from 2021 through 2024, the founder and a senior officer engaged in a scheme to inflate prices, create artificial demand, and mislead investors about the nature of the platform's pricing and regulatory compliance.
According to the complaint filed October 9 in the U.S. District Court for the Northern District of California, Linqto's subsidiary, Linqto Liquidshares, purchased equity in privately held firms—including several valued at over $1 billion—and then packaged those stakes into special purpose vehicles (SPVs). These SPV units were marketed and sold to retail investors through Linqto's online platform. The SEC alleges that total sales reached $430 million, generating more than $160 million in revenue for the company.
The alleged misconduct centered on pricing. The SEC says that while marketing emails in mid-2022 described SPV prices as reflecting "current market conditions" or "below market" valuations, internal spreadsheets showed significant discrepancies. For instance, one company's shares were valued at $20 internally but listed at $44 on the platform; another was valued at $1.75 but priced at $7.50. An internal email from Linqto's Director of Origination and Markets reportedly warned that the "elevated sellside pricing" contrasted sharply with underlying stock values and could attract negative attention.
Starting in June 2021, the SEC alleges Linqto began removing SPV units from the platform, labeling them "sold out" or "fully subscribed" even when inventory remained. The goal, according to the complaint, was to create a "feeding frenzy" among investors. In a March 2023 internal chat, the senior officer allegedly urged colleagues to shift investor psychology toward viewing a popular stock as a "scarce asset that's becoming more expensive—not like water that will always be there whenever you want to turn your tap on." The founder allegedly agreed, saying they would "go dark" and "put the higher price lot up tomorrow to create the continued FOMO."
The most striking allegation involves what Linqto marketed as "dynamic pricing." In April 2023, the company told investors that SPV prices would "rise and fall based on market demand." However, the SEC claims that staff continued to set prices manually. The founder allegedly acknowledged this in an internal chat, calling himself "a little Wizard of Oz" and adding, "don't pay attention to the man behind the screen." He also reportedly wrote, "we're in control of the manipulation, so no outsider can take advantage." Even after an algorithm was introduced in late May 2023, the founder allegedly continued to adjust its inputs, sometimes multiple times a day, making the company's claims about market-driven pricing false or misleading.
The complaint also details a pattern of ignoring legal advice. Three separate law firms, starting in 2020, warned that Linqto's SPVs likely qualified as "investment companies" under the Investment Company Act of 1940 and therefore required SEC registration. The founder allegedly responded, "Doesn't matter what attorneys and accountants tell us... We will do it in a way that makes sense and if three years from now they tell us we should have done it differently we will pay the fine." Despite these warnings, Linqto sent marketing emails assuring investors it had "taken zero shortcuts" and was "meeting all relevant SEC and IRS requirements."
Additionally, between September 2023 and at least January 2024, the SEC alleges Linqto sold SPV units to investors who did not meet the accredited investor thresholds, without the proper registration. Outside counsel had recommended the company "immediately terminate" those sales.
Both executives received performance-based bonuses, and the founder allegedly arranged for his wife to sell 2 million shares of Linqto common stock through a venture capital firm, netting $4 million for the marital estate. Linqto filed for Chapter 11 bankruptcy in July 2025 after new leadership discovered what the complaint describes as "extensive and serious securities law violations." The company has not yet emerged from bankruptcy.
The SEC is seeking permanent industry bans, disgorgement of profits, and financial penalties, and has requested a jury trial. This case underscores the regulatory scrutiny facing alternative investment platforms, a topic also explored in a recent SEC suit against Meyer Global and allegations against a crypto AI platform. Advisors should note that the SEC is increasingly focused on private market retail access, as highlighted in proposed changes to accredited investor rules.
