Additionally, the SEC alleged that Meenavalli and Altahawi misrepresented to NASDAQ the number of qualifying Longfin shareholders and shares sold in the offering.
Furthermore, the SEC alleged that Longfin and Meenavalli engaged in accounting fraud, recording over $66 million in sham revenue.
In a statement, Anita B. Bandy, Associate Director of the Division of Enforcement, commented, “In our complaint against Longfin and Meenavalli and our amended complaint against Altahawi, we allege a multi-pronged fraud involving fake revenue, misrepresentations to the SEC, and false statements to Nasdaq.”
The SEC filed its complaint in the federal district court in Manhattan. The U.S. Attorney’s Office for the District of New Jersey filed related criminal charges against Meenavalli.
Previous complaint against the defendants
Last year, the SEC obtained a court order freezing over $27 million of its trading proceeds from allegedly illegal distributions and sales of its restricted shares.
The Commission alleged that Longfin, Meenavalli, its secretary and director Izzelden Altahawi and two other affiliated individuals Dorababu Penumarhi and Suresh Tammineedi violated federal securities laws. They allegedly illegally distributed and sold over $33 million of Longfin sock in unregistered transactions.
