Today, the Securities and Exchange Commission (SEC) charged three individuals with participating in a $120 million pre-IPO Fraud Scheme.
John LoPinto, Robert Wilkos, and Laren Pisciotti are the three people involved in the case filed in the U.S. District Court for the Eastern District of New York. The case alleged that the trident violated the antifraud and other provisions of the federal securities laws and the companies owned by the defendants were also complicit.
Three charged in NY for violations of securities laws
According to court documents, the SEC alledges that from October 2019 until December 2022, the defendants raised “approximately $120 million from more than 900 investors in the U.S. and abroad by selling interests in private funds that supposedly held shares in pre-IPO companies, that is, privately held companies that had not yet conducted an initial public offering.”
The three also were reportedly complicit in providing false information about the investments including lies that “there were no upfront fees in the investments while in fact paying themselves at least $16 million in commissions; that the funds were registered with the SEC when they were not; and that the funds owned shares in pre-IPO companies when they did not.”
The legal action brought forward by the SEC concerns the stolen funds, along with prejudgement interest and civil penalties from the three. The SEC is also looking to ban LoPinto, Wilkos, and Pisciotti from further trading and business-related activities in the future. Wilkos, has agreed to settle the case and consent to injunctive relief, with the court determining additional remedies at a later date.
“As alleged, among other lies, the defendants lied about the shares they owned and about fees they said they wouldn’t charge, and in the end, they took millions of their investors’ money for themselves,” said Stacy L. Bogert, Associate Director of the SEC’s Division of Enforcement. “Today we start the process of holding them accountable for their fraudulent conduct.”
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