The Securities and Exchange Commission (SEC) added new fraud charges against Longfin Corporation, its CEO Venkata Meenavalli.
Longfin claimed to be a fintech company that acquired a cryptocurrency company called Ziddu, which had no ascertainable value.
The Commission alleged that Longfin and Meenavalli falsified the company’s revenue.
Meenavalli and a former Longfin consultant allegedly committed fraud to secure the company’s listing on NASDAQ. The company allegedly conducted a fraudulent public offering of its shares.
SEC accused Longfin and its CEO of multi-pronged fraud
In its lawsuit, the SEC said Longfin and its CEO falsely represented in SEC filing that it is managed and operated in the United States to obtain qualification for a Regulation A+ offering. However, the Commission found that the company’s assets, management and operations remained overseas.
The Commission alleged that Longfin and Meenavali engaged in a fraudulent scheme by distributing more than 400,000 shares of the company’s shares to affiliates and insiders to meet certain NASDAQ criteria, without obtaining payment for those shares.