StraightPath’s House of Cards
As StraightPath gained momentum through aggressive cold-calling campaigns, the operation evolved into what prosecutors called a “house of cards.”
Funds were shuffled between accounts to create the illusion of investment activity, while the founders paid themselves over $24 million each and splurged on luxury homes, cars, and travel.
The defense argued the trio may have been “careless” but not criminal, claiming many investors ultimately profited when the pre-IPO stocks went public. The jury, however, sided with prosecutors, who presented detailed records showing lavish spending and false documentation designed to mislead clients.
SEC Settlement and Criminal Fallout
The criminal case, filed in 2023, followed an SEC settlement reached in mid-2022, after StraightPath collapsed under the weight of investigations. The company is now under receivership, with federal authorities working to recover what remains of investor funds.
Prosecutors emphasized that the founders’ actions went beyond poor management — they amounted to a systemic betrayal of trust, exploiting everyday investors’ fascination with high-growth tech IPOs.
“They turned Wall Street dreams into a nightmare for hundreds of victims,” Assistant U.S. Attorney Adam Hobson said.
