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The US Securities and Exchange Commission on Friday sued a Florida firm it said raised at least $410 million by fraudulently promising investors access to private companies that had potential to conduct initial public offerings.
In a civil complaint filed in Manhattan federal court, the SEC also sought asset freezes against StraightPath Venture Partners LLC and its three founders, to help arrest “ongoing fraud” at the firm.
The SEC said StraightPath raised the $410 million from more than 2,200 investors in 14 countries between November 2017 and February 2022, when it agreed to stop soliciting investments. US District Judge Lewis Kaplan said at a hearing that he will grant much of the SEC’s requests temporarily “to preserve the status quo,” pending another hearing on May 26.
The SEC said StraightPath pitched its investment vehicles as a way for ordinary investors to own “highly coveted,” hard-to-find pre-IPO shares in such companies as plant-based burger maker Impossible Foods and cryptocurrency exchange Kraken.
But the SEC said the Jupiter, Florida-based firm often did not have the shares, made “Ponzi-like” payments to some investors, and commingled investors’ assets with its own.
