Venkata Meenavalli, CEO of fraudulent financial services company Longfin, has settled for $400,000 with the US Securities and Exchange Commission (SEC).
The SEC initially filed fraud action against Longfin Corp and Meenavalli in June 2019 for falsifying company revenue and fraudulently listing on the Nasdaq stock exchange.
Meenavalli publicly stated that the inflated value of his company following the acquisition announcement was an overvaluation in an interview with CNBC in December 2017.
The regulator claims that the acquisition of a cryptocurrency company just two days after Longfin went public was a deliberate effort to pump the company’s stock alongside the cryptocurrency market hype.
Penalties and settlement
Meenavalli has now agreed to settle the dispute by paying $400,000 in disgorgement and penalties, which will bring a close to proceedings against him.
This includes $159,000 dollars in salary which he received while acting as CEO of Longfin, interest of $9,000, and an additional $232,000 civil penalty fine.
Meenavalli will also have to surrender his remaining Longfin stock, and he is barred from becoming a company director in the US for life.
Longfin’s CEO and three other executive officers personally gained over $26 million from the scheme, which the SEC is now seeking to redistribute to affected investors through a Fair Fund program.
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