William Sarris, the founder of private-company investment firm Linqto, has been charged with defrauding investors, according to federal prosecutors. The charges allege that Sarris improperly marked up the prices of pre-initial public offering (IPO) shares before selling them to investors.
Linqto operates as a platform that allows accredited investors to purchase shares in private companies, often referred to as pre-IPO shares. The firm aimed to provide access to investment opportunities in companies before they become publicly traded on stock exchanges.
The allegations suggest a scheme where Sarris allegedly misrepresented the value of these shares, leading investors to pay inflated prices. This practice, if proven, would constitute a breach of fiduciary duty and potentially violate securities laws designed to protect investors from fraudulent practices.
This case highlights the risks associated with investing in private markets, where valuations can be less transparent and regulatory oversight may differ from public markets. The charges against Sarris could have implications for Linqto's operations and its reputation within the private investment sector.