A federal judge in Manhattan ruled that Longfin, a now-defunct company whose shares increased by 1000% in 2017 after buying an undervalued cryptoj company, must pay $223 million plus interest to investors for alleged securities fraud.
In a decision of 29 July, Judge Denise Cote set a nine-fold amount, which Longfin owes jointly, its CEO Venkata Meenaalli, CTO Vivek Ratakonda and the director of two related companies, Suresh Tammineedi.
The ruling granted the default judgment requested by Mohammad Malik in January. Malik's argument highlighted Longfin's lawyer's request to withdraw from the case in December 2018, noting that it is no longer "in the interest of Longfin Corp's creditors" to continue fighting in this case.
Judge Cote's order stated that Malik 'offered sufficient probative support through statements and evidence presented in support of his claim for damages', adding that 'no probative hearing is required'.
In September 2017. Longfin made its debut as a public offering under Regulation A+, allowing it to raise funds from both accredited and non-accredited investors, while being exempted from a number of registration requirements under the Securities Trading Act of 1934.