Indian-origin entrepreneur's crypto company under SEC scanner for securities violations

An Indian-origin entrepreneur Venkat Meenavalli is being investigated by the US Securities and Exchanges Commission (SEC) for alleged securities fraud with his cryptocurrency company Longfin (LFIN).
The company was suspended last week from trading on the Nasdaq Stock exchange, according to a statement by the regulator. Meenavalli, his associates, and Longfin are being investigated by the SEC.
In December, Longfin listed on the Nasdaq with a $300-million market cap riding on the Bitcoin craze among investors. Its stock price jumped over 10 times taking the market cap to over $3 billion, the SEC statement said.
On April 6, the US Securities Exchange Commission (SEC) suspended the stock, which had a market cap of $2.1 billion, after it found that the company illegally sold a large block of restricted Longfin shares when the stock price was high, in violation of securities rules.
SEC has alleged that Longfin's chief executive Meenavalli had issued shares to his associates Andy Altahawi, Dorababu Penumarthi and Suresh Tammineedi who held it on his behalf and later sold stocks at elevated prices, booking a profit of $27 million. The SEC has obtained a court order to freeze the $27 million.
The SEC's complaint, which was filed on April 4, charges Longfin, Meenavalli, Altahawi, Penumarthi, and Tammineedi for violating Section 5 of the Securities Act of 1933. The complaint seeks injunctive relief, disgorgement of ill-gotten gains, and penalties, among other relief.
Meenavalli claimed that the trading of Longfin Corp shares has been halted due to delay in filing its Form-10-Q for the third quarter.
"The alleged probe by the US market regulator SEC was primarily owing to some confusion over the applicability of the said securities laws to 'Reg A' IPO firms like the company", said Meenavalli, chief executive of LongFin Corp. "There were no criminal charges slapped on the company and that the SEC is put a temporary freeze on assets as a civil case."
Meenavalli, however, said he is hopeful of convincing the SEC to revive trade of its stock.
"They (regulators) are saying that restricted shares are sold. But shares sold are of IPO float except Mr. Andy (Altahawi) whose shares restriction expired on March 11," Meenavalli told over phone from the US. "The regulators are saying these people sold restricted shares with my permission. No lock-in shares are sold. The people sold IPO shares," he said.
Meenavalli said the company was taking time for compiling and hoped that "trading will start next week, subject to compliance." He said the SEC allegations for freezing of assets of individuals has nothing to do with the company.

Trending News

Xiaomi pumps Rs 3,500 crore into India business

BlackBuck's out to raise $150M in new round, valuation likely to jump to $800 M

With $21 Billion, Azim Premji among world’s top philanthropists

Google agreed on a $45M exit package for India-origin exec accused of sex abuse

HSBC pegs Zomato's valuation at $3.6 billion ahead of Swiggy

PayU in talks to acquire online payments firm Wibmo for $60M

Quikr close to acquiring refurbished goods marketplace Zefo in all-stock deal

What life looks like after a layoff from an IT company

General Atlantic & Tencent pump in another Rs 80 Cr in ed-tech unicorn Byju's

US Senator Warren vows to break up Amazon, Facebook, Google

SoftBank extends tech reach with $5B Latin American fund

Coverfox hits the market to raise $50M in new financing round

Cognizant faces US lawsuit alleging discrimination

China's Huawei sues US over federal ban on using its products

Germany's Delivery Hero acquires Zomato's UAE biz, invests in India ops

Ahead of deadline, debate rages on e-commerce policy

Flipkart rejigs reporting of Myntra-Jabong head Amar Nagaram

Grofers raises fresh funds from existing investors, valuation hits $425M

Sachin Bansal invests Rs 250 Cr each in NBFCs Altico & IndoStar: Report

I-bank Wolet files $800k suit over Flipkart’s Upstream buy

Flipkart FY18 revenue up 50%, but losses grow 5x

Pine Labs in talks to acquire Amazon-backed Qwikcilver for $100M

India can become 2nd largest 5G market in 10 years: Huawei

Alibaba rival Pinduoduo seeks to raise $1.5B

Twitter Q4 revenue grows to $909M as video ad sales surge

Mukesh Ambani to invest $1.4B in West Bengal, will help e-commerce expansion

Etail may lose Rs 40,000 crore, retail to get a 3rd of it

Steadview Capital invests $74M in Ola valuing it at around $6B

Byju’s ups revenue to Rs 490 cr in FY 18, losses drop by half

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities