Linqto’s former chief revenue officer Gene Zawrotny filed a lawsuit against the Delaware company that sold Ripple stock.
The lawsuit was filed on October 7 in Santa Clara County, California, and includes two Linqto executives as defendants.
Zarotny accused the investment firm and its executives of market manipulation, fraud, insider trading, and unlicensed brokerage.
Zarotny complaint details
Crypto Eri, a well-known figure in the XRP community, shared details of the latest Linqto case in a forum Recent X posts. The plaintiff, Zawrotny, who was Linqto’s chief revenue officer, claims he was wrongfully fired for raising concerns about the company’s irregularities.
He alleged that the Delaware investment firm engaged in insider trading and put profits ahead of client needs. The plaintiff also accuses Linqto of using an unlicensed broker and making false user base claims.
in his complainZawrotny claimed that Linqto’s claim of having more than 750,000 users was untrue. Court documents say the investment firm has just 10,000 users, of which only 30% are accredited.
In addition, the complaint alleges that Linqto increased its stock price to more than 150% of FINRA’s recommendation. The company also allegedly uses a special algorithm to mark the share price of each sale.
The technology creates an artificial market that drives demand by convincing investors that stocks are nearly sold short.
Additional Allegations of Violations Against Linqto’s Sale of Ripple Shares
Previous complaints allege Linqto circumvented SEC Rule 506(b) and used misleading marketing tactics. It also accused the company of failing to fully comply with FINRA’s guidelines.
The plaintiffs allege that the company and its executives deliberately ignored these concerns. Additionally, Zawrotny said Linqto failed to fulfill its commitments to him. The company allegedly promised the plaintiff good stock options and competitive salary.
However, Linqto allegedly failed to meet these expectations. Instead, the company fired Zarotny after 107 days on the job. He also claims the company terminated his employment to prevent his stock from vesting and to avoid addressing compliance issues he raised.
Zarotny called his dismissal unfair and damaging to his career and financial well-being. Accordingly, Plaintiff seeks injunctive relief, punitive, special and general damages, including attorneys’ fees.
Founded in 2018, Linqto offers private market investments starting from as low as $2,500, making it easy for investors to enter the stock market. Linqto allows investors the opportunity to invest in stocks of different companies, including Ripple.
In 2022, the company will go public Ripple stock ahead of IPO on its platform. While Ripple has yet to IPO, Linqto is offering shares representing its investment in the blockchain payments company. The company has repeatedly announced the sale of Ripple shares through X posts.
Additionally, last year, Linqto announced plans to use XRP as a payment method for its tokenized private equity proof-of-concept. In March last year, Ripple Chief Technology Officer David Schwartz also confirmed that Linqto was a legitimate investment platform..
He laid out the company’s strategy and how it promotes investments in companies such as PolySign, of which Schwartz is a board member.
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