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

Online companies are now selling meat and a new perception

Infosys enters JV in Japan; to pay about 2.7 billion yen

Naspers and CPPIB back Byju's, valuation jumps to $3.6 billion

Small sellers on Amazon, Flipkart seek PMO help to safeguard their interests

RBI seeks opinion of Indian govt & NPCI on WhatsApp's payment approval delay

Google+ to now shut down in April after finding a new privacy bug that affected 52.5M users

Indian govt likely to meet FY19 digital payments target

Obopay partners with Federal Bank & Mastercard to launch its own prepaid card for corporates

UrbanClap facilitates ESOP sale for upto Rs 18 crore

Walmart to tap Flipkart's tech expertise

Snapdeal claims to have added 50,000 sellers in last 12 months

Amazon targets airports for checkout-free store expansion

PayU India’s valuation estimated at $2.5 billion: Citi report

Amazon India & Flipkart are on similar run rate of $11.2B: Barclays

Tencent Music presses play on $1.2 billion U.S. IPO

Instagram Shopping may launch in India in 2019: Report

PhonePe users can now directly book IRCTC train tickets on the app

Facebook opens monetisation features for Indian content creators

UrbanClap raises $50M from Steadview Capital & Vy Capital

Xiaomi India nears Rs 23,000 cr in revenue within 4 years of operations

Paytm's unlisted owner One97 tops ₹1 lakh crore in valuation

Amazon may buy out Kishore Biyani's Future Group in new business deal

With $1.8B, Bessemer looks to make bets across fintech, healthcare technology & SaaS

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