The Securities and Exchange Commission (SEC) has obtained a court order freezing more than $27 million in trading proceeds from allegedly illegal distributions and sales of restricted shares of Longfin Corp (LFIN) stock involving the company, its CEO, and three other individuals. According to the complaint filed today in federal court in Manhattan, Longfin’s stock price rose after it began trading on the NASDAQ and acquired a purported cryptocurrency business. Its market capitalization exceeded $3 billion. The SEC alleges that Amro Izzelden Althahawi, Dorababu Penumarthi and Suresh Tammineedi then illegally sold blocks of their restricted Longfin shares to the public while the stock price was high. They collected more than $27 million in profits from the sales. Longfin’s CEO Venkata Meenavalli, allegedly caused the company to issue more than two million unregistered, restricted shares to Altahawi, who was the corporate secretary and director of Longfin, and tens of thousands of restricted shares to two other affiliated individuals. These are all in violation of the Securities Act of 1933. Longfin is described as a USA based global FinTech company that is reimagining the world of Alternative Finance (Shadow Banking), $72 trillion industry powered by Artificial Intelligence, Machine Learning and Blockchain enabled Smart Contracts, according to its website.
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