April 4, 20183min856

Blockchain Linked Fintech Firm Longfin Investigated by SEC

US Securities and Exchanges Commission (SEC) announced an investigation into blockchain linked fintech firm Longfin sending their stock price plummeting by 30%.


 

Longfin is a NASDAQ-listed fintech company (LFIN) whose stock price shot up more than 1,000% last December following an acquisition of Ziddu.com, a company specializing in smart contracts and micro-lending using Blockchain technology.

Longfin disclosed the investigation in a public 10-K filing to the SEC on April 2.  So far this year their stock is down by over 80%. It’s currently  trading at $9.39 per share.

LFIN Stock Chart Dec. 2017-April 2018
LFIN Stock Chart Dec. 2017-April 2018 (Image courtesy of NASDAQ.com)

“We are in the process of responding to this document request and will cooperate with the SEC in connection with its investigation. While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation does not mean that the SEC has concluded that anyone has violated the law,” Longfin submitted in their 10-K filing to the SEC.

On the 5th of March the Division of Enforcement of the SEC informed Longfin that they would be investigating trading in the company’s shares and requested documents regarding its IPO and acquisition of Ziddu.com.

Longfin CEO Venkat Meenavalli openly acknowledged that the stock price spike last December, was unrealistic, stating that:

“This market cap is not justified. I valued my IPO pricing at $5.” Meenavalli added, “We are a profitable company… We have nothing to do with this euphoric mania.”

SEC has been very active in 2018 as it continues to crack down on ICOs and now even IPO companies, which they suspect may be using Blockchain technology to manipulate the markets.


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