Private-Share Platform Linqto Seeks Chapter 11 Amid SEC Probe

Private-shares marketplace Linqto filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas on 8 July, saying regulatory probes and internal lapses left its business untenable. The Securities and Exchange Commission, the Financial Industry Regulatory Authority and, according to a Wall Street Journal report, the Justice Department have been scrutinising the company’s sales of pre-IPO stock. In court papers, Chief Executive Officer Dan Siciliano said an internal investigation uncovered “serious defects” in how Linqto was formed and operated, raising doubts about whether customers actually owned the securities they bought. The platform, which halted operations in March, holds roughly $500 million of shares in 111 private companies on behalf of users. Linqto has lined up as much as $60 million in debtor-in-possession financing from Sandton Capital Partners to keep the business functioning while it explores strategic alternatives. The collapse highlights the regulatory and transparency risks retail investors face when trading stakes in lightly-supervised private markets.