The Cryptocurrency company Longfin was condemned by the US Court to pay about $6,755,848 in fines and disgorgement to the US Securities and Exchange Commission (SEC) for leading fraudulent public offers and falsifying revenue from false goods transactions.
October 1, 2019, | AtoZ Markets – Longfin Corp. operates as an independent finance and technology company. They offer alternative risk transfer, commodity trading, and carry trade financing services. They also provide hedging and risk management solutions to importers, exporters, and small/medium business enterprises. They serve customers worldwide.
Falsely obtained qualification for Regulation A+ offering
Several years ago, Longfin completed a Reg A+ offering and quickly listed on the NASDAQ at $5 shares. At the time of the announcement, the shares of Longfin trade are at stratospheric heights. While being interviewed on CNBC, Longfin’s CEO Meenavall himself called the valuation “insane”.
The SEC’s protest that Longfin and Meenavalli obtained qualification for a Reg A+ offering by falsely representing in SEC filings. The SEC demanded that Longfin was operating offshore. The SEC claimed that Longfin and Meenavalli distributed over 400,000 Longfin shares for free to insiders and affiliates. And they distorted the number of qualifying shareholders and shares sold in the offering to meet the NASDAQ’s listing requirements.
The SEC’s also claimed that Longfin and Meenavalli had more than $ 66 million in fictitious revenue from fake commodities transactions, accounting for more than 90% of Longfin’s total revenue in 2017. The SEC as well as the United States Attorney’s Office for the District of New Jersey has an ongoing action against Meenavalli.
US Court fines Longfin
SEC previously accused Longfin and Meenavalli of illegally having distributed and sold over $ 33 million of Longfin shares in unrecorded transactions. These accusations are now resolved, as Longfin and Meenavalli were recently sentenced to pay civil penalties of $ 284,139 and $ 28,416 respectively.
SEC announced on September 30 that a US court had issued a default judgment against the finance company for conducting a fraudulent public offering and falsifying revenue. The US Court ordered the crypto company Longfin to pay a total of $ 6,755,848.
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