The Securities and Exchange Commission (SEC), has reported that Venkata S. Meenavalli, CEO of Longfin Corp., has agreed to pay $400,000 in disgorgement and fines to settle the fraud case against him by the SEC. Longfin CEO settles fraud action for $400,000 with SEC.
The SEC plans to set up a Fair Fund to allocate to affected investors money earned by the defendants.
It was alleged in the SEC complaint that Longfin and Meenavalli obtained a qualification in public filings for a Regulation A+ offering by misrepresenting the company in the U.S.
Longfin and Meenavalli then circulated over 400,000 Longfin company shares to Meenavalli’s associates. According to the lawsuit, they misrepresented Nasdaq’s offer to meet their listing criteria.
The lawsuit also alleged that the selling of fake commodities fictitiously generated more than 90% of the revenue reported by Longfin for 2017.
In a separate filing, the SEC alleged that Longfin, Meenavalli and three related persons illegally exchanged and sold more than $33 million of Longfin stock in unregistered transactions.
Previously, the SEC had secured a default judgment against Longfin, which ordered monetary compensation of about $6.8 million.
The Court ordered three affiliates to disgorgement and fines in their excess of $26 million in June 2019, and in August imposed default rulings on Longfin and Meenavalli, which ordered civil penalties of $284,239 and of $28,416.
“The SEC staff’s quick actions exposed the full scope of Meenavalli’s fraud and resulted in additional monetary and prophylactic relief to prevent him from defrauding U.S. investors in the future,” said Anita B. Bandy, Associate Director of the Division of Enforcement.
Meenavalli decided to settle the case, for now, without accepting or denying the claim of the regulator.