Linqto Founder Faces Federal Charges Over Alleged $450,000,000 Pre-IPO Price Inflation Fraud Scheme
The founder of a failed pre-IPO investment platform allegedly deceived more than 13,000 customers by manipulating private stock prices and collecting excessive markups, according to federal prosecutors.
William Sarris, 75, the founder of Linqto Inc., was arrested after prosecutors unsealed an indictment charging him with securities fraud, broker-dealer fraud, wire fraud and conspiracy, according to the Justice Department.
Prosecutors allege Sarris ran the scheme from 2020 through 2025 by taking advantage of the difficulty customers faced in determining the actual market value of private-company shares sold through Linqto.
The platform marketed itself as a way for ordinary investors to buy stakes in private companies that were expected to eventually go public. Because those securities did not have readily available market prices, prosecutors allege Sarris used his informational advantage to manipulate what customers paid.
According to the indictment, Sarris manufactured artificial scarcity to push prices higher and altered Linqto’s pricing model to increase revenue while telling customers they were purchasing shares at “market” prices.
Prosecutors also allege Sarris imposed markups that went far beyond what his own attorneys had repeatedly warned could be lawful.
The alleged scheme was driven in part by Sarris’s desire to increase the value of his ownership stake in Linqto. The inflated revenue and growth generated by the markup strategy helped make the company appear more successful as Sarris looked for an opportunity to sell his equity.
Sarris allegedly went further by avoiding regulatory requirements that could have forced Linqto to disclose information and limited its ability to impose the markups.
When Linqto came under financial pressure in January 2025, prosecutors say Sarris sold shares that had been allocated to customers’ holdings to help the company meet its revenue targets without informing those customers.
Linqto ultimately filed for bankruptcy by the middle of 2025. By then, prosecutors allege the scheme had brought in more than $450 million from over 13,000 customers.
Sarris, who lives in Monterey, California, faces two counts of securities fraud, one count of broker-dealer fraud and one count of wire fraud. Each carries a maximum penalty of 20 years in prison.
He is also charged with conspiracy to commit securities fraud and broker-dealer fraud, as well as conspiracy to defraud the United States and conduct unregistered investment company transactions.
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