Ripple CEO Brad Garlinghouse responded to questions regarding the sale of company shares through Linqto, a private equity platform under investigation.
Comment from Ripple CEO
Garlinghouse issued a statement clarifying Ripple's stance on its ties with Linqto. He explained that Ripple itself never sold shares to Linqto or had any formal business relationship with the platform. According to him, Linqto acquired 4.7 million shares of Ripple solely on the secondary market from other shareholders.
Investigation and Allegations Against Linqto
According to a Wall Street Journal investigation, former Linqto CEO William 'Bill' Sarris allegedly offloaded Ripple shares to users on the platform, many of whom were retail investors. Internal emails revealed that shares were sold at a markup of more than 60%, which was not disclosed to customers. An external law firm later stated that their selling practices could constitute securities fraud.
Internal Struggles and Power Transition at Linqto
In March, Bill Sarris stepped down as CEO, later signing a memo accusing the new management of exaggerating violations. He and his wife Vicki co-founded Linqto in 2010. New CEO Dan Siciliano stated that serious securities law violations have been uncovered, bringing the company to the brink of bankruptcy.
The situation surrounding Linqto raises serious questions about compliance in the private investment sector and the protection of investor rights, especially as interest in technology and platforms offering access to closed markets continues to grow.
