Current Linqto Management Recaps Rationale For Filing for Chapter 11 Bankruptcy Protection

Details of Fraud Committed by Ex-CEO and Founder William (Bill) Sarris and Prior Management Team

Defrauded Customers Come First; Upcoming Confirmation Hearing Provides Opportunity to Emerge from Bankruptcy with Greatest Possible Return in Shortest Duration

Influencers Received Millions of Dollars to Promote Linqto’s Fraud

SAN JOSE, Calif.–(BUSINESS WIRE)–Linqto, Inc. today re-released a detailed account of the rationale for filing for Chapter 11 bankruptcy protection, reviewing the serious fraud and misconduct committed by William (Bill) Sarris, Linqto’s former Chief Executive Officer and founder and the prior management. The Company shared new information connected to the fraudulent behavior that occurred under Mr. Sarris’ leadership, reiterated the timeline of events, and restated the facts previously submitted by Linqto to the United States Bankruptcy Court for the Southern District of Texas in the Company’s First Day Declaration.

“As we approach the confirmation of the Plan of Reorganization, our priority is delivering the greatest possible return to customers in the shortest time, and the baselessness of Mr. Sarris’ objections only serves to undermine this priority,” said Dan Siciliano, Linqto Chief Executive Officer. “As repeatedly stated in court, this is a fraud case, pure and simple. Mr. Sarris’ actions during his time as CEO of Linqto directly contributed to the destruction of the business. Mr. Sarris tragically rigged the platform to take advantage of more than 13,000 innocent customers who simply wanted access to private market investing. Mr. Sarris’ unfounded and last-minute legal objections are costly to customers and a desperate attempt to shift attention from his misdeeds. It’s also worth noting that the Enforcement Division of the Securities and Exchange Commission continue their investigation into Mr. Sarris and have filed multiple claims for recovery.”

Years of Misconduct

Serious Accounting Irregularities Occurred Under Previous Management

• Previous management’s claims of a 56-month streak of profitability are not supported by financial records.
• New management’s internal review identified significant account discrepancies and undisclosed losses.
• Certain investor share transactions raise serious questions regarding prior financial controls and reporting practices.

Unaccredited Customers Were Lied to Repeatedly and Mistreated

• New management discovered that Linqto failed to verify the accredited status of its customers with respect to offerings available only to accredited investors, allowing unaccredited investors to illegally participate in offerings.
• This improper structure created potential rescission claims from unaccredited investors of millions of dollars.
• As a result of misinformation provided to customers and Linqto’s improper operating structure, the Company faced significant potential liabilities, and these liabilities risked exceeding the Company’s assets, which would render Linqto insolvent.

“Finfluencers” Were Paid to Promote Linqto Without Consistent Proper Disclosure

• Throughout Mr. Sarris’ tenure, Linqto paid social media influencers over $2.45 million dollars to promote Linqto through aggressive marketing tactics including driving FOMO (fear of missing out).
• The payments were given in multiple forms including cash, “Linqto Bucks”, crypto airdrops, gifted units of private market securities, and other price discounts.
• Many influencers that received free units of private market securities would frequently avoid required FTC disclosures.
• Linqto did not disclose any of these payments to customers, thereby creating a significant conflict of interest.
• Of the companies heavily promoted by influencers, many resulted in losses, most notably PolySign.
• Notable influencers and the approximate effective compensation they received from Linqto:

1. John Peak received more than $650,000
2. Brad Kimes received more than $550,000
3. Linda P. Jones received more than $325,000
4. Barry Spencer received more than $180,000
5. Ray Fuentes received more than $25,000

Timeline of Events Leading to the Bankruptcy Filing

• On October 7, 2024, Linqto’s former Chief Revenue Officer, Gene Zawrotny, filed a lawsuit against Linqto, Mr. Sarris and Joe Endoso, previously President of Linqto, alleging serious compliance failures and retaliation. This lawsuit is still pending.
• Later in October 2024, the Securities Exchange Commission’s (SEC) Division of Enforcement notified Linqto of an investigation to determine if violations of the federal securities laws had occurred. Linqto is fully cooperating with this ongoing investigation. The SEC also filed four claims in the Bankruptcy proceedings.
• In December 2024, Financial Industry Regulatory Authority (FINRA) conducted an examination of Linqto Capital, Linqto’s broker-dealer affiliate, and referred the matter to FINRA Enforcement. Linqto is fully cooperating with this ongoing investigation.
• Throughout 2024, Linqto conducted a months-long search to hire a new chief executive officer to succeed Mr. Sarris. The Board appointed Dan Siciliano as CEO on January 2, 2025.
• After Mr. Siciliano assumed leadership, he uncovered serious securities law violations dating back to 2020, along with a culture of systematic wrongdoing.
• Following the discovery of these violations, Linqto fired several senior executives involved in the wrongdoing and began an investigation into the Company’s business operations and compliance issues in hopes of remedying the situation.
• New management also discovered that Linqto’s prior management failed to maintain an effective system for verifying the accredited status of its customers with respect to offerings that should have been available to accredited investors only.
• In February of 2025, Linqto hired Sullivan & Cromwell LLP (S&C) to facilitate full cooperation with the SEC investigation and other regulatory investigations.
• Also in February of 2025, Linqto paused operation of the trading platform while it determined the extent of the non-compliance issues.
• On March 13, 2025, the Company determined, based on the severity of the compliance issues and regulatory violations, that it could not resume operations and made the necessary action of indefinitely suspending the trading platform.
• After consulting with its professionals, Linqto determined that the only path forward that would protect customers’ assets was to file for Chapter 11 bankruptcy on July 8, 2025.
• On July 9, 2025, Linqto creditor John Deaton filed a class-action lawsuit on behalf of approximately 4,000 customers alleging that Mr. Sarris misled investors about the nature of their investments. This lawsuit is ongoing.

“When I stepped into this role at the beginning of 2025, I quickly learned that Mr. Sarris and others at Linqto had committed serious securities violations, were responsible for egregious regulatory failures, and had built a business model that relied on manufactured hype and schemes to the detriment of customers,” Siciliano continues. “After uncovering the extent of that misconduct and exploring every possible alternative, it became clear that Chapter 11 was the only viable path to protect customers and preserve the original benefit of the bargain. While this is not an outcome anyone wanted, the bankruptcy process is working exactly as it should. If the plan currently under consideration is approved, Linqto’s customers are expected to recover nearly all their assets in as little as seven months – an unheard-of outcome in bankruptcy.”

About Linqto

Linqto was a global investing platform designed to give accredited investors indirect access to investments in private companies and unicorns. Linqto’s platform has historically provided customers with access to a range of pre-IPO companies. For more details, visit www.linqto.com.

Contacts

Media Contact:

Katie Russo, ThroughCo Communications

krusso@throughco.com
501-282-5069