REUTERS/Mike Blake
- A New York firm, Knightsbridge Private Partners, is accused of making $2.1 million in four months by selling fake shares of Uber, Lyft, Airbnb, and other buzzy tech companies to investors, Forbes reported last week, citing a court filing.
- Now, the Department of Justice is investigating the firm, Forbes found.
- Knightsbridge claimed it had “pre-initial public offering” shares, but investigators allege it never held any shares, Forbes said.
- It’s also accused of selling shares of Palantir, which has not officially filed for an IPO.
- Read more on Business Insider’s homepage.
A New York firm is accused of making a killing by selling phony shares of popular tech companies, Forbes reported last week, citing a court filing.
The complaint from the Department of Justice accused Knightsbridge Private Partners of duping investors into paying $2.1 million for nonexistent “pre-initial public offering” shares of companies such as Uber, Airbnb, and Lyft from October 2018 to January 2019, Forbes said.
Forbes’ Thomas Brewster said the court document showed that Bank of America had seized more than $100,000 related to the alleged fraud.
Some of the investors that Knightsbridge is accused of selling the phony shares to were elderly, including an 86-year-old man from Alabama who told investigators he handed over $125,000 for 2,000 fake Uber shares, priced by the firm at $62 per share, Forbes reported.
The firm is also accused of reaping big checks for shares of other buzzy tech companies it didn’t hold, Forbes reported. According to the report, the complaint said one investor sent a $15,750 check for 250 Lyft shares at $63 per share, while another paid $197,130 for 10,000 shares of Palantir, which has not filed for an initial public offering and may not list on the public market for years.
The DOJ didn’t list the people charged in the case or detail the websites thought to be involved, according to Forbes.
Uber went public in May but has since performed poorly, with shares down roughly 40%. Lyft beat its ride-hailing rival to the public market with its March listing, but it has also struggled to make meaningful gains; its shares are also down about 40% post-IPO.
