We allege that the defendants deceived investors about the pre-IPO shares they held, how much they were charging in fees, and who was controlling the business—all while paying themselves more than $75 million.
The Securities and Exchange Commission has obtained asset freezes and other emergency relief against StraightPath Venture Partners LLC, StraightPath Management LLC and individual defendants Brian K. Martinsen, Michael A. Castillero, Francine A. Lanaia, and Eric D. Lachow to halt ongoing securities violations.
The SEC alleges the defendants were selling pre-initial public offering (IPO) shares they did not own, pocketing undisclosed fees, and commingling investor funds, resulting in Ponzi scheme-like payments.
Defendants were charged with fraud for allegedly running an unregistered broker-dealer with a vast network of sales agents, and raising at least $410 million from more than 2,200 investors from November 2017 through February 2022.
Investors were allegedly told that each investment would be kept separate and that they were not be charged upfront fees. Defendants, however, freely commingled investor funds, paid themselves more than $75 million, and paid their sales agents nearly $48 million from illegal, undisclosed markups on the pre-IPO shares that were, in some cases, as high as 100 percent, according to the securities regulator.
The financial watchdog also told the court there is a share deficit of at least $14 million across the funds and…
