SEC IPO – Florida sues for raising $ 410 million for film fraudulent relationships

The U.S. Securities and Exchange Commission filed a lawsuit against Florida on Friday, alleging that it had raised at least $ 410 million by fraudulently promising to approach private companies with the potential to issue initial public offering to investors.

In a civil lawsuit filed in federal court in Manhattan, the SEC sought to freeze the assets of StraightPath Venture Partners LLC and its three founders and help stop “ongoing fraud” within the company.

The SEC said StraightPath raised $ 410 million from more than 2,200 investors in 14 countries between November 2017 and February 2022.

U.S. District Judge Louis Kaplan said in a statement that he was “grateful” for the SEC’s request to “maintain the status quo” pending another hearing on May 26.

SEC has made StraightPath a way for major investors to own pre-IPO shares in major investors ‘essentials’ and companies such as the plant-based burger maker Impossible Foods and the Cragan Cryptocurrency Exchange.

But the Florida-based Jupiter company has largely not disposed of the shares, paid some investors “Ponzi” and the SEC said it was mixing investors’ assets with its own.

StraightPath charges “excessive and undisclosed fees,” founders Michael Castillo, Franின்ois Lanaya and Brian Martinsen and finance manager Eric Lacho for about $ 75 million and their sales agents nearly $ 48 million. Allows you to pay millions of dollars.

“Defendants have greatly benefited,” said Kaplan’s SEC attorney Lee Greenwood.

StraightPath charges investors a one-time “construction diligence” fee of 5%, plus 2% management fee and 1% fee.

StraightPath’s lawyers said the SEC’s demands were “absolutely unnecessary”, citing the company’s years of cooperation with the regulator.

“They’re coming to court with an incomplete picture,” said Samson Enser, one of Kaplan’s lawyers.

Prosecutors said the SEC had “explicitly provoked” the SEC to open a larger jury trial on StraightPath, and that the freezing of assets would make it harder for individual defendants to argue against that criminal investigation.

The judiciary did not immediately respond to a request for comment.

According to the SEC, StraightPath funds hold more than $ 200 million in bonds, but seven companies, including Impossible Foods and Cracken, have $ 14 million less in pre-IPO shares. SEC also asks for a recipient for the company.

Case SEC v StraightPath Venture Partners LLC et al., U.S. District Court, New York Southern District, no. 22-03897. (Reporting by Jonathan Stampel New York; Editing by Matthew Louise, Barbara Louise, Sisu Nomiyama and Richard Song)