Ripple’s CEO distances firm from federal investigations into Linqto’s shares scandal

Ripple CEO Brad Garlinghouse addressed questions over the sale of Ripple shares through Linqto, a private equity trading platform. Linqto is under investigation by both the Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ) for its sales practices, which allegedly misled thousands of retail investors.

Garlinghouse shared a statement to clarify Ripple’s position regarding its ties to the stock trading company. 

“Understandably, there have been many questions from those who believed they were buying Ripple shares from Linqto, and what happens next,” the CEO wrote. He reiterated that the firm itself never sold shares to Linqto or had any formal business relationship with the platform.

“What we know from our records is Linqto owns 4.7 million shares of Ripple, solely purchased on the secondary market from other Ripple shareholders (never directly from Ripple),” Garlinghouse continued. He added that Ripple stopped approving secondary market purchases by Linqto in late 2024 after questions were raised about the firm’s operations.

Internal memos: Ripple share sales led to losses

According to a Wall Street Journal investigation, Linqto’s former CEO, William “Bill” Sarris, was allegedly at the front of sales offloading Ripple shares to the platform’s 11,000 users, many of whom were retail investors unaware of what the company was.

In January 2023, Sarris launched what he called a “Spike Day,” a sales campaign that could boost Ripple share sales. In internal emails reviewed by the Journal, Sarris asked employees to use every possible channel, including emails, ads, influencers, and even “smoke signals,” to push the sale. 

He reportedly sold Ripple shares at a markup of over 60% without disclosing the pricing details to customers. The SEC generally flags price hikes above 10%.

An outside law firm later reviewed the transactions and asserted that Linqto’s way of selling the equity could constitute securities fraud. An internal probe found that many Linqto users never legally owned the shares they believed they purchased. 

The company had also seemingly allowed some individuals who were not accredited investors, those with a net worth over $1 million or annual earnings above $200,000, to participate in private share sales, in violation of federal securities regulations.

Linqto is now on the brink of bankruptcy. Dan Siciliano, who became CEO in March 2025, said an internal investigation had uncovered “serious securities law violations” and practices far beyond minor compliance issues. 

“Much of what we discovered about the prior business practices at Linqto is disturbing,” he told WSJ.

Power struggles inside a firm at the brink of collapse

In March, 74-year-old Bill Sarris stepped down as CEO and later signed a memo accusing the new management of exaggerating the violations to wrest control of the company. A board subcommittee called all his claims “groundless.”

Sarris and his wife Vicki co-founded Linqto in 2010 and gradually took the company toward the private equity trading direction. With connections to Ripple and other high-profile startups, Linqto marketed itself as a “pathway” to investing in tech unicorns like SpaceX, Stripe, and Anthropic. 

The platform grew popular by offering low investment minimums, sometimes as little as $1,000, and serving retail investors shut out of traditional private equity markets.

John Deaton, a Massachusetts attorney and Linqto customer representative, invested nearly half a million dollars into private companies through the platform. He once was once a fan of the company’s methodology to democratize private investing, but is now against it. 

“If Linqto marked up prices on shares and misled its clients, then all they did was take advantage of unsophisticated investors,” he said in an interview back in April.