SEC v. Longfin Corp., et al.
Case No. 18-cv-2977-DLC (S.D.N.Y.)
On April 4, 2018, unsealed on April 6, 2018, the Commission filed a complaint (the “Complaint”) against Longfin Corp. (“Longfin”), Venkata S. Meenavalli (“Meenavalli”), Amro Izzelden Altahwi a/k/a Andy Altahawi (“Altahawi”), Suresh Tammineedi (“Tammineedi”), and Dorababu Penumarthi (“Penumarthi”) (collectively, the “Defendants”). Among other things, the Complaint alleged that, from December 2017 to February 2018, the Defendants violated the federal securities laws by conducting sales of over $27 million of Longfin’s securities through unregistered distributions. See the Complaint.
The Court has since entered final judgments against all of the Defendants, ordering them, in the aggregate, to pay disgorgement of $22,862,377.23 and civil penalties of $3,582,941.97, for a total monetary liability of $26,445,319.20. Each of the final judgments orders the Commission to hold the funds (collectively, the “Fund”) pending further order of the Court. See Altawahi Final Judgment; Penumarthi’s Final Judgment; Tammineedi’s Final Judgment; Longfin’s Final Judgment; and Meenavalli’s Final Judgment.
The Defendants have paid, approximately, $26.1 million and these collections currently reside in an interest-bearing account at the U.S. Treasury’s Bureau of Fiscal Service. Any future funds collected pursuant to the Defendants’ Final Judgments will be added to the Fund, as well as any funds from related actions directed to the Fund by a court or Commission Order.
On April 15, 2020, the Court entered an order establishing a Fair Fund for the monies paid into the Fund (the “Fair Fund”), appointing Miller Kaplan Arase LLP as the Tax Administrator for the Fair Fund, and Epiq Class Action and Claims Solutions, Inc. as the Distribution Agent of the Fair Fund. See the Court Order.
On May 22, 2020, the Commission filed a Motion for an Order to Show Cause, seeking the entry of an Order to Show Cause why the Court should not approve the Commission’s proposed plan to distribute the Longfin Fair Fund (the “Proposed Plan”). See the Commission’s Motion.
On May 26, 2020, the Court granted the Commission’s motion and entered the Order to Show Cause. Individuals and entities who purchased Longfin Class A common stock, traded on the NASDAQ under the trading symbol LFIN, during the period June 16, 2017 through April 6, 2018, or other interested parties, have until June 25, 2020 to show cause, if there is any, why the Court should not enter an Order approving the Proposed Plan. The process by which cause can be shown is set forth in the Order to Show Cause. See the Court’s Order to Show Cause and the Proposed Plan. See the Court’s Order to Show Cause and the Proposed Plan.
For more information, please contact the Commission:
Office of Distributions