The head of a New York venture capital firm pleaded guilty to conspiracy in connection with an alleged scheme to defraud investors with false promises of pre-IPO shares.
Last year, the U.S. Securities and Exchange Commission (SEC) charged Vika Ventures LLC and its CEO and co-founder, George Iakovou, for fraudulently selling more than US$6 million of securities to investors, purportedly to invest in shares of private companies ahead of their initial public offerings (IPOs).
U.S. authorities said Tuesday that Iakovou pleaded guilty to one count of conspiracy to commit wire fraud. He is scheduled to be sentenced on Dec. 19.
According to court filings, Iakovou told investors that Vika had access to pre-IPO shares in private companies such as Palantir, Airbnb, SpaceX and Stripe, and that it would distribute these shares to investors once a six-month lockup period expired.
“In fact, Iakovou had neither access to pre-IPO shares in the advertised companies nor owned the shares at the time of the solicitations,” the authorities said, alleging the money was diverted to personal use.
Last week, the SEC obtained a judgment from a U.S. district court against Vika, ordering it to pay a US$8.9-million penalty. It also previously settled with the firm’s co-founder, Penelope Zbravos, for her role in the scheme.