©Reuters. FILE PHOTO: The US Securities and Exchange Commission (SEC) seal is seen at its headquarters in Washington, DC, on May 12, 2021. REUTERS/Andrew Kelly
NEW YORK (Reuters) – The U.S. Securities and Exchange Commission on Friday sued a Florida firm it said had raised at least $410 million by fraudulently promising investors access to private companies that had the potential to conduct IPOs.
In a civil lawsuit filed in Manhattan federal court, the SEC also requested an asset freeze against StraightPath Venture Partners LLC and its founders to stop what it called an “ongoing fraud.”
StraightPath did not immediately respond to requests for comment.
The SEC said that StraightPath offered its investment vehicles as a way for ordinary investors to own potentially lucrative, hard-to-find pre-IPO stocks.
But the SEC said that StraightPath often didn’t have the stock to back its investments, and some investors made “Ponzi-style” payments while its founders and a portfolio manager kept about $75 million in investor money.
The Jupiter, Fla.-based company reportedly raised the $410 million between November 2017 and February 2022 from more than 2,200 investors, the SEC said.
https://www.investing.com/news/stock-market-news/sec-accuses-florida-firm-of-fraud-in-ipolinked-investments-2824531 SEC accuses Florida firm of fraud in Reuters IPO-related investments