© Reuters. FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly
NEW YORK (Reuters) – The U.S. 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 an asset freeze against StraightPath Venture Partners LLC and its founders, to halt what it called an “ongoing fraud.”
StraightPath did not immediately respond to requests for comment.
The SEC said StraightPath pitched its investment vehicles as a way for ordinary investors to own potentially lucrative, hard-to-find pre-IPO shares.
But the SEC said StraightPath often did not have the shares to back up the investments and made “Ponzi-like” payments to some investors, while its founders and a portfolio manager kept about $75 million of investor money for themselves.
The Jupiter, Florida-based firm allegedly raised the $410 million from more than 2,200 investors between November 2017 and February 2022, the SEC said.
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