US charges two former Linqto CEOs over $450 million 'pre-IPO' fraud scheme, one pleads guilty

NEW YORK: US prosecutors announced on Wednesday criminal fraud charges against two former chief executive officers ‌of Linqto over their alleged roles in a $450 million scheme to defraud thousands of investors hoping to cash in on private companies before they went public.

William Sarris, 75, who founded Linqto and was CEO of the now-bankrupt Silicon Valley online investment platform for ​14 years, was charged in Manhattan with six counts including securities fraud, wire fraud, broker-dealer fraud and ​conspiracy.

Joseph Endoso, 66, who succeeded Sarris as CEO after serving as president, pleaded guilty ⁠to securities fraud, broker-dealer fraud and conspiracy charges and is cooperating with prosecutors.

Prosecutors said Sarris exploited investors’ difficulty ​in valuing companies such as Anthropic, Ripple and the now-public SpaceX that were expected to conduct initial public offerings, or “pre-IPO” ​companies, by manufacturing “false scarcity” and charging markups that drove up prices and the value of his Linqto stake, which he wanted to cash out.

The alleged scheme occurred from 2020 to 2025. Linqto filed for Chapter 11 bankruptcy protection in July 2025.

“William Sarris is innocent of ​these charges and intends to fight them,” his lawyer Tim Treanor said in an email. “Linqto’s customers do face ​real questions about what they will get back, but those questions come from a bankruptcy filed six months after Bill stopped ‌running the ⁠company—not from the investments themselves.”

A lawyer for Endoso did not immediately respond to requests for comment. Sarris lives in Monterey, California, and Endoso lives in Ross, California, prosecutors said.

‘A little wizard of OZ’

Private companies typically face less regulation and scrutiny than public companies, requiring investors to be extra vigilant for signs of potential fraud.

According to an indictment, ​Sarris falsely assured investors they ​were buying at “market” prices, ⁠based on an algorithm that would set prices based on supply and demand.

Instead, Sarris allegedly imposed high double-digit percentage markups, and sometimes markups exceeding 200%, though his lawyers ​told him repeatedly it was illegal.

Sarris allegedly joked privately that his pricing pitch was “fake ​it till you ⁠make it, baby,” and pricing would be set by “a little Wizard of Oz. … Don’t pay attention to that man behind the screen.”

The scheme attracted in excess of $450 million from more than 13,000 investors, prosecutors said.

By January 2025, with Linqto’s ⁠business under ​pressure, Sarris allegedly sold some customers’ holdings to meet revenue targets. ​Linqto suspended operations two months later.

In February, a Texas bankruptcy judge approved Linqto’s reorganization plan, which offered customers a choice between stakes in a ​liquidating fund or a closed-end fund holding private shares.