Federal prosecutors in the Southern District of New York have unsealed an indictment charging William Sarris, the 75-year-old founder and former chief executive of pre-IPO investment platform Linqto Inc., with running a multi-year securities and broker-dealer fraud scheme that drew in more than $450 million from over 13,000 retail investors. Sarris was arrested in California following the indictment, while his former second-in-command, Joseph Endoso, pleaded guilty to parallel fraud charges and entered into government cooperation.
The unsealed criminal filings detail how Linqto—which pitched itself as an equalizer allowing everyday investors to buy synthetic or secondary equity in high-profile private venture companies like Ripple, SpaceX, and Anthropic—allegedly operated on fabricated scarcity and hidden, staggering price markups that frequently eclipsed 200%.
Exploiting Information Asymmetry in Private Tech Secondary Markets
Unlike listed equities traded on national exchanges under continuous quote dissemination, private startup shares lack transparent price discovery mechanisms. Prosecutors allege that Sarris deliberately weaponized this structural opacity from 2020 through Linqto's eventual insolvency in mid-2025.
According to the indictment, Linqto assured buyers they were purchasing private equities at fair prevailing "market" prices. In reality, Sarris allegedly manipulated internal pricing tiers and overrode internal formulas to engineer artificial price surges. Furthermore, when Linqto confronted liquidity constraints in early 2025, prosecutors allege Sarris unlawfully liquidated shares already allocated to existing customer accounts without authorization to plug operating shortfalls and satisfy company-level revenue figures.
The Forensic Context: Pre-IPO Vehicles as Unregistered Shadow Brokerages
For short-sellers and forensic researchers who have long critiqued late-stage venture capital valuations, the Linqto collapse demonstrates what happens when the venture downturn collides with retail syndication models. Platforms packaging private company shares via special purpose vehicles (SPVs) frequently operate in regulatory gray zones, sidestepping standard broker-dealer disclosures and statutory investment company classifications.
Legal counsel had repeatedly warned Sarris that the firm's escalating markups breached permissible regulatory thresholds, yet the practices expanded to pump Linqto's apparent revenue in anticipation of its own planned public listing. The prosecution highlights systemic hazards for retail investors attempting to participate in unicorn hype through intermediaries that capture double-digit spreads without independent custodial safeguards.
Key Takeaways
- The U.S. Attorney's Office for the Southern District of New York unsealed criminal charges against Linqto founder William Sarris for securities fraud, broker-dealer fraud, and wire fraud.
- Linqto attracted over $450 million from 13,000 customers by offering access to pre-IPO startups before collapsing into bankruptcy in mid-2025.
- Prosecutors allege Sarris manufactured artificial scarcity, misrepresented market pricing, and concealed markups exceeding 200%.
- Former Linqto executive Joseph Endoso pleaded guilty to criminal fraud and is cooperating with the Justice Department.
Sources
- U.S. Department of Justice Press Release — "Former Executives Of 'Pre-IPO' Investment Platform Charged In Connection With $450 Million Fraud Scheme," September 2026
- FBI New York Field Office Announcement — Sarris Indictment and Endoso Plea Agreement Disclosures, September 2026
- WealthManagement.com Industry Report — "Former Linqto CEO Arrested for Fraud," September 3, 2026
Original reporting by Department of Justice. This article is desk analysis prepared by The Forensic Ledger from publicly available sources, summarized with citation to the original.
Not investment advice. This is original reporting and analysis prepared by The Forensic Ledger from publicly available data. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.
