A federal court in New York has frozen some $27 million of alleged illegal trading proceeds of stock in Longfin Corp. (OTC: LFIN) following a complaint filed by the SEC alleging that Venkata Meenavalli, company founder and CEO, and three other company affiliates had distributed or sold unregistered and restricted shares in violation of federal securities laws (http://ccw.fm/L1IgQ).
The SEC complaint also named Amro Izzelden Altahawi, Dorababu Penumarthi and Suresh Tammineedi. Altahawi was corporate secretary and director, the SEC said. Penumarthi and Tammineedi were allegedly company affiliates acting as nominees for Meenavalli. The agency charged in the original sealed filing on April 4 that Longfin and the four individuals allegedly violated securities law when they illegally distributed or sold large blocks of restricted shares. Collectively, the SEC said that Altahawi, Penumarthi and Tammineedi made greater than $27 million in profits from the sales.
“We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country,” Robert Cohen, chief of the SEC Enforcement Division’s Cyber Unit, stated in a news release. The complaint seeks injunctive relief including disgorgement of ill-gotten gains and other penalties.
LFIN is a U.S.-based finance and technology global fintech company powered by artificial intelligence (AI) and machine learning. It has operations in New York, India, Singapore and Dubai. It acquired Ziddu.com, holding it as a subsidiary late last year, and LFIN’s market capitalization skyrocketed to greater than $3 billion according to the SEC, with the company’s stock price becoming highly elevated. The company later voluntarily delisted its common stock from Nasdaq and began trading last month on the OTC (http://ccw.fm/Jum3P).
Subsequent events included Meenavalli appearing on MSNBC and complaining about the large amounts of short selling of company stock, according to The Motley Fool (http://ccw.fm/A0RRy). Several class action lawsuits were filed against the company alleging that it violated federal securities laws.
To read the full press release, visit SEC Obtains Emergency Freeze of $27 Million in Stock Sales of Purported Cryptocurrency Company Longfin at http://ccw.fm/L1IgQ.
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