Linqto: The $450M Markup Machine

DerekPicture this. You're staring at a listing, SpaceX shares pre-IPO, and right across the top it says, "Sold out."

GrantOkay. Sold out. Fine. Scarcity happens.

DerekExcept prosecutors say it wasn't sold out. They say somebody just typed that.

GrantWait, they made it up?

DerekThat's the allegation, yeah. Manufactured scarcity to jack up the price on the next batch.

GrantDude.

DerekThis is Vaporware. I'm Derek, that's Grant, and today we've got a four hundred and fifty million dollar number attached to a name you may not know yet.

GrantGive it to me.

DerekWilliam Sarris, founder of Linqto. And in September of twenty twenty-six, federal prosecutors charged him with securities fraud, broker-dealer fraud, wire fraud, and conspiracy.

GrantThat's basically the whole menu.

DerekEvery entrée.

GrantSo how does ordinary investors get a piece of SpaceX turn into a four-count federal indictment?

DerekOh, you're gonna love this part. We're rewinding to the pitch itself.

GrantThe one that sounded too good?

DerekThe very one.

GrantI'm ready. Take me back to when this thing looked completely legitimate.

DerekBuckle up, because it looked very legitimate for a very long time. Okay, so rewind. Linqto's whole pitch from day one was ordinary investors finally getting a seat at the table, buying pre-IPO shares in companies like SpaceX, Ripple, and Anthropic.

GrantThe stuff normally locked up for venture firms and insiders.

DerekExactly that. And it wasn't total fiction. A Reuters-sourced piece on the case noted Linqto had actually been running that pitch for fourteen years before it collapsed into bankruptcy.

GrantFourteen years? That's not some flight by night app somebody spun up last spring.

DerekNope. Built, running, Sarris at the helm the entire stretch.

GrantSo when does legit access turn into a federal case?

DerekThat same Reuters piece ties the alleged scheme itself to twenty-twenty through twenty-twenty-five. Anthropic, Ripple, and SpaceX shares specifically.

GrantWait, hold on. How does a middleman even get SpaceX shares? SpaceX doesn't sell stock to random people off the street.

DerekThat's the question.

GrantI mean, genuinely, Musk not stacking shares on a shelf at Best Buy. No, he is not.

DerekSo where's Linqto pulling the shares from to sell slices of them to us?

GrantEmployees, early investors, funds looking to cash out early. That part's not the scam.

DerekEmployees, early investors, funds looking to cash out early. That part's not the scam.

GrantSo far so normal.

DerekSo far so normal. Funds do this all the time. Buy in, package it, resell access to people who couldn't get in the room themselves.

GrantOkay.

DerekSo the access was real, sort of. But how Linqto held those shares, packaged them, priced them before handing you a slice, that's where the structure gets weird.

GrantWeird? How weird?

DerekPaperwork-you've-never-heard-of weird.

GrantOh, no.

DerekOh, yeah.

GrantGive me a preview at least.

DerekOne word. Entities. A lot of entities.

GrantEntities, plural. That's never a good sign.

DerekIt's never a good sign.

GrantThat sounds like a Tuesday for a lawyer and a nightmare for a customer.

DerekBasically.

GrantOkay, so ordinary investors. What's ordinary mean here? Anybody with a laptop and login?

DerekPretty much the sales pitch, yeah. No accredited investor velvet rope. Just sign up and buy in.

GrantThat's the whole hook then. Skip the venture guys. Buy in yourself.

DerekRight. And it worked that whole stretch without anybody in a courtroom asking hard questions about how the shares were actually held.

GrantWhich is wild given how much money eventually ended up on the table.

DerekAllegedly, yeah. And that's exactly what starts to unravel next.

GrantFourteen years of running Linqto is a long time to build trust before anything cracked.

DerekIt is. And that trust is exactly what makes the next part land so hard.

GrantCan't wait.

DerekOkay, so a lot of entities. Here's what that actually meant. Each SPV, the special purpose vehicle thing, could only hold ninety-nine investors.

GrantNinety-nine, not a hundred.

DerekNinety-nine exactly. Once a hot company like the ones we mentioned filled up, Linqto didn't turn people away.

GrantThey just made another one.

DerekSpun up a whole new SPV, and then another. Wealth Management's reporting on this says for the really popular names, Linqto created hundreds of these things.

GrantHundreds for one company?

DerekHundreds of separate ninety-nine investor buckets all stacked on top of each other.

GrantThat's not a cap. That's a conveyor belt.

DerekRight. The cap was never the limit on demand. It was just the limit on how many people could see inside any one deal.

GrantSo nobody in bucket forty-seven knows bucket twelve paid.

DerekThat's the shape of it, yeah.

GrantThat's genuinely wild. If I'm bucket forty-seven, I don't even know bucket twelve exists.

DerekRight. You just see your own listing and your own price. You have zero visibility into the other ninety-nine person boxes stacked next to yours.

GrantOkay, so what does Sarris' team say about all this?

DerekHis attorney's name is Timothy Treanor, and he's denied the wrongdoing outright.

GrantSure. Of course he has.

DerekBut here's the specific line Treanor's using. He's framing that huge dollar figure as money that came into the platform, not money that left investors' pockets.

GrantThat's a hell of a distinction to hang your defense on.

DerekIt's the whole defense, basically. Money flowed in, therefore nobody was robbed.

GrantBut money coming in doesn't tell you what it bought. If I stack three hundred ninety-nine person boxes on the same company.

DerekYou can price each box differently and nobody's the wiser.

GrantExactly. Where does that money actually go once it's in the platform? Does the SPV pile explain the markups, or does it just bury them?

DerekThat is genuinely the question everybody's chasing right now.

GrantI want a number. Give me a number.

DerekYou'll get one. It gets a lot clearer once you look at how Linqto actually priced these shares in the first place.

GrantPriced them how?

DerekWait for it. Okay, so the pricing. Prosecutors say Linqto would mark a listing sold out while the shelf was actually full behind it.

GrantWait, so nobody could buy in on purpose?

DerekThat's the idea. Manufacture the panic, and the next batch moves at whatever price they set.

GrantThat's just the fake countdown timer on the checkout page.

DerekBasically, except the checkout page is pre-IPO Anthropic stock.

GrantOh, that's so much worse.

DerekAnd then in twenty twenty-three, they roll out this thing called an automated market maker.

GrantSounds fancy. Sounds like math is doing the work.

DerekThat's the pitch. Demand sets the price. Totally hands-off. Prosecutors say Sarris was in there manually nudging it himself.

GrantSo the robot has a guy behind the curtain.

DerekA guy trying to hit a revenue number by Friday.

GrantWait, so the algorithm was just him?

DerekAllegedly, yeah. Turning a dial until the day's number looked right.

GrantOkay, that's not an algorithm. That's a guy with a mouse.

DerekKind of. And here's the number that makes the whole thing click.

GrantHit me.

DerekThe unsealed indictment says the markups went past two hundred percent on some of these shares.

GrantTwo hundred percent. So a share worth a hundred bucks-

DerekGets sold for three hundred, and the buyer thinks that's just what SpaceX stock costs right now.

GrantBecause there's no ticker to check against.

DerekRight. Nobody's pulling up a quote for pre-IPO Anthropic shares.

GrantThat's the part that gets me. A two hundred percent markup isn't rounding error. That's basically tripling the price and calling it market rate.

DerekExactly. And nothing about the listing tells you that's what happened. So if I'm sitting there looking at my portfolio, I have no idea I overpaid by two hundred percent.

GrantNone. There's no comparable price to check it against. That's the whole trick. The number just looks like the number.

DerekSo who told him that was a problem?

GrantHis own lawyers, apparently. The indictment says he'd been warned the practice was unlawful.

DerekAnd he kept going?

GrantAccording to prosecutors, yes.

DerekThat's not a gray area. That's a memo he ignored. And that's the detail that turns aggressive pricing into an actual charge. You can't say you didn't know if your own counsel told you to stop.

GrantThat's not, "We didn't realize." That's, "We were told and did it anyway."

DerekThe creator brief on this one calls it exactly what it looks like, a two hundred percent markup scheme, full stop.

GrantSo we've got fake scarcity and a rigged pricing dial. Feels like plenty to build a case on already.

DerekYou'd think. But wait. The scarcity and the markups are the mechanism. They're not the motive.

GrantWhat do you mean?

DerekI mean, somebody had a reason to want that revenue number climbing every single day.

GrantOkay, now you have my attention. Who?

DerekSarris himself, and it's tied directly to his own paycheck.

GrantShut up.

DerekWait for it. So we've got the scarcity trick. We've got the pricing trick. Now, here's the part that actually explains why he'd bother.

GrantWait, this is the part where we find out he ate his own cooking?

DerekBetter. In twenty twenty-three, Linqto's board handed Sarris something like one point nine million restricted company units.

GrantRestricted how?

DerekThey don't vest unless the company hits a qualifying exit, a sale, a merger, something valued at five hundred million or more.

GrantSo his own payday is literally staked to the number going up.

DerekThat's the indictment's framing. Yeah. The board grant ties his comp straight to inflated valuation.

GrantAnd the fastest way to inflate a valuation on a platform like this-

DerekIs to jack up the price of every share moving through it. Funny how that works.

GrantWild coincidence. So walk me through what that actually looks like day to day. He's watching a live number and deciding whether the platform needs a push.

DerekThat's the allegation. Not passive investing, not a rising tide. A guy actively steering the price of every listing that touches his own vesting math. Prosecutors don't think it's a coincidence at all.

GrantOkay, but walk me through what he's actually charged with, because I lost count somewhere around the SPVs.

DerekFederal prosecutors hit him with securities fraud, broker-dealer fraud, wire fraud, conspiracy. Those four charges filed this September.

GrantRight. Right. And he's not alone in this, is he?

DerekNo. His former CEO, a guy named Joseph Endoso, already pled guilty.

GrantAlready? Like, before Sarris even got arraigned?

DerekBefore, and he's cooperating with prosecutors right now.

GrantOh, that's bad for Sarris.

DerekThat's very bad for Sarris. The guy who ran the machine from the inside is telling the government how the sausage got made.

GrantSo walk me through it. If Endoso's the one who saw the machine from the inside, does his plea line up with the RSU story?

DerekThat's exactly the thread. Two things we've been circling all episode, where the SPV money actually went and how that pricing engine got rigged. They meet right here.

GrantIn one guy's stock grant.

DerekIn one guy's stock grant that only pays out if the number keeps climbing.

GrantIt's almost elegant in a horrible way.

DerekIt's a motive, is what it is. Not abstract greed, a literal number on a vesting schedule.

GrantOkay, but here's what's bugging me. Linqto selling securities. There are grown-ups whose whole job is watching for this exactly.

DerekYou'd think. And to be fair, the SEC does eventually catch a lot of these, just usually years after the money's already moved.

GrantSo how does a Broker-Dealer platform run this for years and nobody flags it?

DerekComes down to a licensing loophole, and it's dumber than you'd guess.

GrantDumber how?

DerekGive me the next segment, and I'll show you the paperwork.

GrantFine, but I want the dumb part first.

DerekSo walk me through this loophole, because broker-dealer sounds like a box you either check or you don't.

GrantThat's the thing. Linqto actually got broker-dealer approval. Twenty twenty-three. Legit license, legit paperwork.

DerekWait, so they did it right?

GrantFor about five minutes. The reporting says even after getting approved, most of the actual trades kept getting routed through a separate unregistered entity.

DerekWhy would you get the license and then just not use it?

GrantBecause the registered entity comes with oversight, compliance people asking questions. The unregistered one doesn't. So the approval was basically a costume.

DerekPretty much. Something to point to if a regulator or a reporter asked, "Hey, are you licensed?" Yes, technically, just not for the trades that actually mattered.

GrantThat's diabolical. That's... Okay, that's actually kind of brilliant in a horrible way.

DerekIt's the exact same trick as the SPV stacking, honestly. Build a legitimate-looking front, run the real business somewhere the rules don't reach.

GrantAnd nobody at the SEC just noticed a broker-dealer routing trades outside itself?

DerekApparently not fast enough, which, by the way, is kind of the whole story of pre-IPO investing in one sentence.

GrantWhat do you mean?

DerekThere's no ticker, no public order book, no SEC filing telling you what a share of some private rocket company is actually worth. You are trusting the platform to tell you the truth.

GrantRight, because with the public stock, I can just look it up.

DerekExactly. With this stuff, the price is whatever the platform says it is. That's not a bug of pre-IPO investing. That's the entire design.

GrantSo the opacity isn't just how the scheme worked. It's the reason the scheme was even possible.

DerekThat's the read. Take away the fog, and there's nothing to hide the markup in.

GrantSo if you strip away the fog, the whole scheme just stops working.

DerekPretty much. No opacity, no cover for the markup.

GrantDark. Okay, so licensed on paper, unregulated in practice, opaque pricing the whole way through. That's a lot of ways for something to go wrong quietly.

DerekAnd it did, for years. But quiet doesn't mean invisible forever, Grant.

GrantMeaning?

DerekMeaning eventually the money runs out, the SPVs stop covering for each other, and the whole thing lands in a courtroom.

GrantBankruptcy court.

DerekBankruptcy court. And that's where this stops being alleged and starts being a balance sheet. Okay, so bankruptcy court. This is where the story gets weirdly procedural for a minute, but stick with me.

GrantProcedural how bad?

DerekInvestmentNews reported that Linqto's Chapter 11 reorganization plan was confirmed in February 2026, with ninety-five percent of creditors voting yes.

GrantNinety-five percent? That's basically everybody. Doesn't mean everyone's happy, just means enough people signed off to get it moving.

DerekThat's fair. Creditor votes aren't a satisfaction survey. And the plan gives customers three choices, a closed-end fund, a liquidating trust, or some hybrid of the two.

GrantSo people actually get to pick their flavor of we'll see what's left.

DerekPretty much.

GrantWhat's actually sitting in the estate though? Like, is there real value here, or is it a shell?

DerekThere's real value. InvestmentNews reported the estate holds stakes in a hundred and eleven private companies worth over five hundred million dollars.

GrantWait, five hundred million?

DerekIncluding Ripple and SpaceX shares.

GrantSo the shares people were promised are genuinely sitting there, not vaporized.

DerekThey're sitting there. Whether people get their exact promised slice back is the fight.

GrantMeaning?

DerekInvestmentNews also reported there's an ongoing dispute with a company called Forge, and Linqto itself says that fight threatens to delay recovery for more than thirteen thousand customers.

GrantForge got what to do with any of this?

DerekIt's a separate legal fight tangled up with Linqto's own claims, and it's slowing down when the thirteen thousand actually see a check.

GrantThirteen thousand people waiting on a lawsuit they're not even a party to.

DerekBasically.

GrantAnd Sarris, does he take any of the blame for the mess, or is he already out the door by then?

DerekThis is the part his lawyer leans on hard. Reuters reported that Sarris' attorney argues the recovery problems trace back to the Chapter 11 filing itself.

GrantNot the trades.

DerekNot the trades. And the filing came six months after Sarris had already left the company.

GrantSix months is a long runway to blame the paperwork.

DerekLong enough that his lawyer is betting a jury buys.

GrantSo the defense is basically blame the filing, not the guy who allegedly rigged the prices.

DerekThat's the argument, yeah.

GrantConvenient timeline.

DerekSure is.

GrantDoes it hold up?

DerekDepends who you ask, and honestly, depends what a jury thinks about a hundred and eleven companies sitting in an estate while thirteen thousand people wait on a fight with Forge.

GrantRight.

DerekThe case against Sarris is still sitting on a federal docket right now, unresolved, no trial date locked yet.

GrantAnd whatever jury eventually decides-

DerekThe shape of it doesn't change. Fake scarcity, a maze of entities, pay tied to a number nobody could verify. We've told versions of this story before, just with different logos on it.

GrantDifferent companies, same playbook.

DerekSo we've spent two whole episodes on SpaceX's own hype, the reusable rockets, the Mars slides, all of it.

GrantThe pitch decks that made grown adults empty their savings accounts.

DerekRight. And Linqto was just selling tickets to that same show, a markup on somebody else's dream.

GrantThat's what gets me. Nobody had to fake the excitement about SpaceX. It was already there.

DerekThey just built a toll booth in front of it.

GrantA very expensive toll booth.

DerekAnd it worked because the excitement was real. That's the part that's almost admirable in a horrible way.

GrantAdmirable is a strong word for printed a fake sold-out sign, but sure.

DerekSarris hasn't gone to trial yet, so we don't know how a jury sees any of it.

GrantBut the shape of the story? We've drawn this shape before.

DerekDifferent logo, same blueprint.

GrantAll right, go bug somebody. If you've got a friend who forwards you every pitch deck like it's a stock tip-

DerekSend them this episode instead of another one of those decks.

GrantSubscribe if you haven't, and leave us a review. It actually helps.

DerekIt really does.

GrantWe'll see you next time.

DerekTry not to buy any pre-IPO shares before then.