Linqto Inc., which sells securities through Linqto Capital, is currently under investigation by the SEC. Allegations include failing to give accurate information to investors, selling investments to unsuitable investors and failing to purchase shares for certain investors.
Linqto sold investors Single Purpose Vehicle (SPV) investments that purported to place retail investors in pre-IPO holdings. To market its SPV, it used guerilla-style marketing appealing to small investors who often lack the investment sophistication to appreciate the risks of private investments.
One such campaign in January 2023 sought to sell the crypto currency company “Ripple.” Linqto tried to sell Ripple pre-IPO shares to Linqto’s users at a price at least 60% higher than what Linqto paid. The difference between the price a brokerage pays for an investment and the price the brokerage sells the investment to its investors is referred to as a “markup.” The SEC prohibits markups above 10%. Linquto did not disclose this unreasonably heightened markup to it investors and collected $2 million in fees.
It is alleged that not only did Linqto sell non-accredited and unsophisticated investors, in violation of state and federal securities laws, but that it bragged about the violation. As reported in the Wall Street Journal, Linqto’s CEO sent an email to his company stating, “When we go for a Spike Day (over $1M in sales), we sometimes have to pull out all stops and even sell to the unwashed.“
Regulators also allege that Linqto failed to purchase investments on behalf of some paying investors.
In July 2025, Linqto filed for bankruptcy protection in the Southern District of Texas Bankruptcy Court.
SPVs are investment vehicles where a group of investors join together to purchase a certain investment or a certain type of investment. The investors do not own the investment directly, but instead own a proportionate share of the SPV. SPVs are commonly used for things such as investing in private, pre-IPO shares of certain companies. While claiming to be democratizing such markets, these vehicles can victimize smaller, retail investors.
The investments use a Regulation D platform. This means that the actions of fund managers is largely opaque and the guardrails to protect smaller investors is absent.
For over 20 years, we have represented investors victimized by investment professionals and post information to keep investors informed. An investor forewarned is an investor forearmed. This post is for educational and informative purposes only.
Recent Comments