SEC Investigating Nasdaq Listed Cryptocurrency Reg A
LongFin’s stock had soared more than 1,000 percent in two days after the company announced in mid-December it was buying a microlending company using the same blockchain technology as bitcoin. The blockchain connection and related price spike made LFIN the only Reg A+ IPO of 2017 to end the year above its IPO price.
According to the company’s 10-K filed on April 3rd, “On March 5, 2018, the Division of Enforcement of the SEC informed the Company that it is conducting an investigation In the Matter of Trading in the Securities of Longfin Corp. and requested that the Company provide certain documents in connection with its investigation, including documents related to our IPO and other financings and the acquisition of Ziddu.com. We are in the process of responding to this document request and will cooperate with the SEC in connection with its investigation. While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation does not mean that the SEC has concluded that anyone has violated the law. Also, the investigation does not mean that the SEC has a negative opinion of any person, entity or security.”
The stock currently sits at around $10 per shares, a sharp decline from its high of $142.82 in December.
The SEC investigation isn’t the only thing negatively impacting LFIN’s stock price. The stock dropped sharply last week after a negative tweet from noted short-seller Andrew Left’s Citron Research, and news that FTSE Russell was removing Longfin from its benchmark Russell indexes due to insufficient free-floating shares.
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