SEC Obtains Emergency Relief to Halt Pre-IPO Stock Fraud Scheme by Unregistered Broker-Dealer

The Securities and Exchange Commission today announced that it obtained a preliminary injunction, asset freeze, and other emergency relief against Legend Venture Partners LLC, a New York City-based unregistered broker-dealer, in connection with a fraudulent scheme involving the sale of interests in private companies that had the potential for a public offering. Last year, the SEC shut down a similar scheme by StraightPath Venture Partners LLC, for which Legend’s principals and many of its sales agents had previously worked. The SEC’s complaint, filed on June 22, 2023, alleges that, from February through October 2022, Legend ran boiler room operations that sold securities issued by the Legend Funds, which invested in shares or interests in shares of specific pre-IPO companies.