Federal prosecutors have charged William Sarris, founder of the private-company investment firm Linqto, with defrauding investors. The allegations center on claims that Sarris artificially marked up the prices of pre-IPO shares sold through his platform.
The charges were filed in connection with an alleged scheme that involved inflating the value of shares in private companies. Prosecutors say Sarris misrepresented pricing to investors, leading them to pay more than the true market value for their stakes.
Linqto, which operates as a digital platform, allowed investors to buy shares in privately held firms that had not yet gone public. These pre-IPO investments typically carry higher risks, and the company marketed access as a way to gain early entry into high-growth companies.
According to court documents, Sarris allegedly added undisclosed markups to the share prices offered on the platform. Investors were reportedly told they were receiving fair and accurate valuations when the figures were instead padded to increase firm revenue.
The case adds to a broader regulatory focus on the private-placement market, where transparency rules are less stringent than for public securities. Authorities have stepped up scrutiny of platforms that facilitate secondary trading in private companies.
Sarris now faces potential penalties that include fines and restitution if convicted. The charges are based on federal securities laws designed to protect investors from fraudulent practices, and the outcome will hinge on evidence presented during the proceedings.
For investors, the incident underscores the need for due diligence when purchasing private-company shares. Unlike public markets, pricing mechanisms can be opaque, and markups may not be immediately visible to buyers.
Linqto has not yet issued a public response to the allegations. The legal process will determine whether Sarris’s actions breached the trust placed in him by clients seeking exposure to pre-IPO opportunities.
