The former CEO of a purported cryptocurrency firm has settled regulatory allegations, but still faces criminal action.
The U.S. Securities and Exchange Commission (SEC) has settled with Venkata Meenavalli, the former CEO of Longfin Corp., who allegedly made false public filings, distributed shares illegally and misrepresented his company’s financials to secure a listing on Nasdaq.
“Longfin’s fraudulent NASDAQ listing allowed Longfin insiders…to sell their positions… These insiders reaped millions of dollars in profits as a result of a sharp increase in Longfin’s share price as a result of Longfin’s and Meenavalli’s exploitation of recent developments in cryptocurrency,” the SEC said in its complaint.
Meenavalli settled the charges without admitting or denying the SEC’s allegations. He agreed to pay US$400,000 in disgorgement and penalties, and to be permanently banned from dealing in penny stocks and serving as an officer or director of a public company.
The deal remains subject to court approval.
Criminal action brought against Meenavalli by the U.S. Attorney’s Office for the District of New Jersey last year remains ongoing. Those allegations have not been proven.
The SEC said that its settlement with Meenavalli concludes its enforcement against Longfin and several individuals. In those cases, the SEC has secured US$26 million of ill-gotten gains, which will be returned to harmed investors.