Former fintech executives face class action lawsuit over alleged securities fraud, triggering regulatory controversy.

Recently, a legal lawsuit against a former executive of a certain fintech company has attracted industry attention. It is reported that a well-known lawyer has filed a securities fraud class action against the company's former CEO on behalf of numerous retail investors.

The litigation documents indicate that the defendant is suspected of manipulating the platform's operations through various improper means during the management period. This specifically includes: failing to disclose markups of up to 60% truthfully, using misleading exemption clauses, and adopting unlicensed sales strategies, among others. These actions primarily revolve around the sale of shares in several well-known private companies through the special purpose vehicle (SPV).

It is noteworthy that the complaint also mentions that the defendant ignored the warnings of the internal legal team during 2023 and 2024, and their actions may have violated multiple regulations of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

In this lawsuit, the lawyer representing the investors emphasized that the lawsuit is limited to the former CEO personally and is not affected by any potential bankruptcy protection of the company. He also stated that if they win the case and receive compensation, the funds will be fully used to compensate the affected investors.

This case has once again sparked discussions in the industry regarding the compliance of private equity trading platforms, serving as a wake-up call for investors to exercise extra caution and fully understand the associated risks when participating in such investments.