Linqto, a Silicon Valley fintech once hailed as a disruptor for retail investors eyeing pre-IPO tech unicorns, has filed for Chapter 11 bankruptcy protection in Texas. The collapse comes as the U.S. Securities and Exchange Commission (SEC) and other federal watchdogs intensify investigations into the company’s alleged failure to comply with securities laws—violations dating back to its platform’s launch in 2020.
Late Monday, Chief Restructuring Officer Jeffrey S. Stein submitted bankruptcy declarations for Linqto and three affiliates, revealing a volatile mix of regulatory threats, investor misrepresentation claims, and a ballooning debt load. The petition estimated the firm’s assets and liabilities somewhere between $500 million and $1 billion.
SEC Heat and Internal Whistleblowing Push Linqto Over the Edge
The drama unraveled after new CEO Dan Siciliano—who replaced founder Bill Sarris in January—discovered cracks in Linqto’s regulatory foundation. What he found was a chilling cocktail: alleged misinformation about investor rights, flawed corporate disclosures, and noncompliance with federal securities regulations.
“The only way forward is to seek court-supervised protection,” Siciliano said, “to restructure into a profitable, law-abiding organization and accelerate the resolution of these investigations.”
But the problems run deeper. In October 2024, the SEC’s Division of Enforcement signaled an investigation. By December, the Financial Industry Regulatory Authority (FINRA) had also handed over an inquiry to its enforcement team. Then, a bombshell: the company’s former chief revenue officer filed a lawsuit in 2024, accusing Linqto and senior executives of significant compliance failures.
