Linqto: SEC Alleges SPV Markups and False “Sold Out” Claims on Over $430 Million of Sales (Oct 9, 2026)

How the product worked

Linqto ran an online platform from February 2020 that let accredited investors buy indirect stakes in private “unicorn” companies. Per the complaint, a subsidiary, Linqto Liquidshares, LLC, bought equity in private companies, “allocated economic interests in that equity” to SPVs, and sold SPV units to retail investors. Each SPV was a separate Delaware series with an economic interest in one private company, so an investor held units of an SPV, not shares of the company. Linqto’s own customer FAQ, published with the bankruptcy, says the same thing from the other side: customers are “not a direct shareholder of any portfolio company” and expect to hold claims against Linqto tied to their transactions.

That structure matters now for two reasons. It is why the SEC’s pricing allegation is about what was charged on top of cost, and it is why customers in bankruptcy are creditors rather than owners of the underlying stock.

The five practices the SEC alleges

The quoted phrases are the complaint’s quotations of Linqto’s emails and internal messages. We have not seen the emails themselves, and the defendants have not yet answered.

Markups in the complaint’s own numbers

The complaint gives pricing figures for unnamed “Company” placeholders, so no one can match them to a ticker from the public document. What it does give is the shape of the gap.

Two cautions. Fair value here is Linqto’s internal figure as the SEC describes it, not an independent appraisal. And a markup is not by itself a violation: the complaint says Linqto disclosed that it sold at a markup but “did not tell investors how large its markups were,” and its legal theory turns on what investors were told about prices. The complaint also says “markups that often exceeded 50% and even 100%” of cost, and in some cases more than 400%.

What the complaint says about incentives and legal advice

• Bonus pools. From about September 2021 to August 2022 a sales bonus pool was 5% of quarterly SPV sales volume; from August 2022 it was up to 1%; from the first quarter of 2023 a company-wide pool was 10% of adjusted EBITDA. The SEC says both defendants’ bonuses were partly set by sales volume and prices.
• The 100-investor limit. The SPVs relied on the Investment Company Act exclusion for issuers with no more than 100 holders. The SEC alleges Liquidshares created duplicate SPVs for the same company, for over a dozen companies, so that thousands held interests in one company’s shares, and that the duplicates should have been counted together.
• The fine as a cost. In a March 18, 2021 exchange the complaint quotes an estimate of a $150,000 fine and a reply that this was “not so bad” against $2 million of revenue that month. On other occasions the SEC says management was told to “pay the fine” if violations were found.
• Warnings. Outside counsel on September 29, 2020, January 10, 2021 and October 17, 2023; the general counsel in October 2024. The SEC alleges sales through unregistered SPVs continued through at least December 2024.

For how the 506(b) and 506(c) routes differ, and what Form D filings show about each, see our 506(b) vs 506(c) Form D census and the guide to qualified purchaser versus accredited investor.

The charges and what the SEC wants

The prayer for relief asks for permanent injunctions, bars on acting as an officer or director of a public company, disgorgement with prejudgment interest and civil penalties; one defendant, who the complaint says has been a registered representative of broker-dealers since August 2003, would also be barred from acting as or being associated with an investment adviser, broker or dealer. The SEC demands a jury trial. The complaint was filed in the San Jose Division, and the SEC’s release thanks the U.S. Attorney’s Office for the Southern District of New York and the FBI for assistance. News reports in September 2026 describe a criminal case in that district; we could not open a Justice Department document, so we do not rely on it and have not verified it.

What happened to Linqto and its customers

Customers had a choice under the plan: a Closed-End Fund managed by VanEck that the company says will be listed on a national exchange, a Liquidating Trust with Kroll’s BW Asset Management Ltd as trustee, or a combination of the two. The company says Forge ended its commitment “without warning or explanation” and that it is pursuing Forge for damages; we have not seen Forge’s side. A new “Deadman Switch” in the modified plan moves the Liquidating Trust assets temporarily to a Wind Down Trust if Kroll has not set up the trust or taken possession of the assets by November 23, 2026.

Two details deserve a plain reading. The February estimate was “about 95% of the current fair market value of their original investment,” and the October release says “approximately 90% to 92% of the current market value of their investments - not merely the original amount they invested.” The wording differs, and neither release gives a dollar total, a share count or a payment date. The October 22 release puts it as “approximately 90% - 92% of the value of their assets on a blended basis.” All of these are statements by the debtor’s own chief executive in press releases.

What is not known

• The SEC case. The defendants have not answered in anything we read. We saw no hearing date, no trial date and no settlement.
• Payments to customers. We found no document stating a distribution date from the Liquidating Trust or a listing date for the Closed-End Fund. The October 28 release says the fund “will be listed”; it gives no date.
• The plan itself. We did not open the plan or the docket, which sit on the claims agent’s site and PACER. Everything about the bankruptcy here comes from Linqto’s releases and customer FAQ, which are the debtor’s own words.
• The criminal matter. We have not verified any criminal charge or plea; the SEC release only thanks prosecutors and the FBI.
• Your own position. What a particular customer holds, what they elected and what they are owed are in their own account records and election, not in public documents.

What a reader can do with this

1. Pull your own paper trail. Account statements, order confirmations, the SPV unit documents and Schedule K-1s for each SPV, and any claim or election form. The company’s FAQ says Schedule K-1s for the 2024 tax year were made available through the Linqto account.
2. Check what you elected and when. The plan gave customers a choice between the fund and the trust, and the company said earlier that elections could be changed before the fund launched. Confirm the current status with the trustee or manager that contacts you, using contact details you reach yourself, not links in an email.
3. Compare your purchase prices with the complaint’s examples. If you bought one of the popular names in 2022 or 2023, ask whether your price is in the range the complaint describes. The complaint masks company names, so this is a question for your records, not a conclusion.
4. Understand the tax side before any loss claim. A loss on a bankruptcy claim or an SPV is a question of timing and character; see our worthless stock deduction guide.
5. Compare the structure with an alternative that files with the SEC. A registered fund discloses fees, holdings and valuation levels in public filings; our Private Shares Fund page shows what that looks like for a pre-IPO interval fund.

FAQ

This is analysis of public documents, not investment, legal or tax advice. All figures come from documents read on November 3, 2026: the SEC’s complaint in SEC v. Sarris and Endoso, No. 5:26-cv-11675 (N.D. Cal., Document 1, filed October 9, 2026) and Litigation Release No. 26672 (October 9, 2026); Linqto, Inc. press releases of February 6, October 22 and October 28, 2026 (Business Wire); and the customer FAQ for Linqto Texas, LLC, Case No. 25-90186 (S.D. Tex.). The bankruptcy plan, the docket and the Justice Department materials were not read.