Investment platform Linqto, which allows users to trade private company stocks, has filed for bankruptcy. The company faces challenges related to alleged securities law violations and is under investigation by the U.S. Securities and Exchange Commission (SEC) and other regulatory bodies. CEO Dan Siciliano highlighted significant flaws in the company's structure and operations, raising concerns about the actual rights held by customers. He noted the company is contending with substantial operational challenges.
This case underscores the risks individual investors face in private markets. While startups like OpenAI and SpaceX have fueled interest in pre-IPO stock investments, this area remains loosely regulated, posing higher risks for investors lacking the protections and transparency typical of public markets.
Linqto has filed a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of Texas. The company has secured up to $60 million in debtor-in-possession financing from Thornton Capital Partners, enabling it to continue operations during restructuring.
