Federal prosecutors have charged William Sarris, founder of private-company investment firm Linqto, with defrauding investors by allegedly marking up prices of pre-IPO shares.

Prosecutors allege that Sarris misled investors about the true cost of shares in private companies, inflating prices to generate higher fees and commissions for Linqto. The scheme reportedly affected thousands of investors who purchased shares through the platform believing they were getting fair market value.

The charges highlight growing regulatory scrutiny of the private-company investment industry, which has expanded rapidly as retail investors seek access to shares before initial public offerings. Linqto positioned itself as a marketplace allowing smaller investors to buy fractional shares in high-profile pre-IPO companies.

Sarris faces multiple charges including wire fraud and securities fraud. If convicted, he could face significant prison time and financial penalties. The case is being prosecuted by federal authorities in coordination with the SEC, which has also opened a related investigation into Linqto's business practices.