SEC Charges Former Linqto Executives Over $430 Million Pre-IPO Scheme
SEC alleges former Linqto executives William Sarris and Joseph Endoso defrauded retail investors in over $430 million of pre-IPO vehicle sales on its platform.
Summary
On October 9, 2026, the SEC charged former Linqto, Inc. executives William Sarris and Joseph Endoso in Securities and Exchange Commission v. William Sarris and Joseph Endoso, No. 26-cv-11675, filed in the U.S. District Court for the Northern District of California. The complaint alleges that, from at least 2021 through 2024, a subsidiary of San Jose, California-based Linqto sold retail investors more than $430 million of special purpose vehicles holding interests in private, pre-IPO “unicorn” companies. Sarris and Endoso allegedly said prices reflected current or below-market values although almost all offerings exceeded fair value, falsely presented available securities as sold out or fully subscribed, claimed an algorithm dynamically priced offerings when personnel set prices manually, and touted legal compliance despite counsel’s warning that the business violated federal securities regulations. They also allegedly operated unregistered investment companies and sold unregistered securities to unaccredited investors.
The SEC alleges violations of Securities Act Sections 17(a), 5(a), and 5(c), Exchange Act Section 10(b) and Rule 10b-5, and aiding and abetting Linqto’s violations of those provisions and Investment Company Act Section 7(a). Sarris also faces control person liability under Exchange Act Section 20(a). The SEC seeks injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars against both defendants.
Anthony Moreno and Matthew Meyerhofer conducted the investigation under Ruth Hawley and Jason H. Lee in the SEC’s San Francisco Regional Office. Moreno and Meyerhofer will lead the litigation under Jason Bussey, with assistance from the U.S. Attorney’s Office for the Southern District of New York and the FBI.
Positives
- The October 9, 2026 complaint seeks disgorgement, prejudgment interest, civil penalties, injunctions, and officer and director bars against both former Linqto executives.
- The SEC’s claims address alleged mispricing, artificial scarcity, misleading algorithm representations, and unlawful securities sales through Linqto’s online platform.
- The U.S. Attorney’s Office for the Southern District of New York and the FBI assisted the SEC investigation.
- The complaint covers more than $430 million of special purpose vehicle sales to retail investors from at least 2021 through 2024.
Risks & concerns
- Almost all Linqto offerings were allegedly priced above fair value despite claims that prices reflected current or below-market conditions.
- Sarris and Endoso allegedly described securities as sold out or fully subscribed while additional shares remained available.
- Linqto personnel allegedly set prices manually despite claims that an algorithm adjusted them dynamically according to investor demand.
- The executives allegedly promoted federal securities law compliance after counsel warned that Linqto’s business violated federal regulations.
- The complaint alleges unregistered investment company operations and unregistered securities sales to unaccredited investors.
- Both defendants face requested civil penalties and officer and director bars, while Sarris separately faces control person liability.