Issue No. 10 — October 12, 2026

SEC v. Sarris and Endoso — the Linqto complaint (N.D. Cal., No. 26-cv-11675, filed Oct. 9, 2026)

The Securities and Exchange Commission sued William Sarris, Linqto's founder and longtime chief executive, and Joseph Endoso, a former president and, for part of 2024, chief executive, of the San Jose pre-IPO platform that filed for Chapter 11 in July 2025. The complaint alleges that from 2021 to 2024 a Linqto subsidiary sold more than $430 million of special purpose vehicles holding private-company interests to retail investors and misled them in four ways: representing prices as at or below market when, with one alleged exception, every security was sold above the company's own internal fair value; presenting offerings as sold out when units remained available; describing pricing as algorithmic when personnel set it manually; and touting compliance with the securities laws after counsel had advised otherwise. It further alleges that the subsidiary operated unregistered investment companies — capping each vehicle at under 100 investors and creating duplicate vehicles after counsel warned they would likely be counted together, as alleged — and sold unregistered securities to non-accredited investors. The claims arise under the Securities Act, the Exchange Act, and the Investment Company Act; the SEC seeks injunctions, disgorgement, penalties, and officer-and-director bars. In a parallel criminal case in the Southern District of New York, an indictment of Sarris was unsealed September 2, and Endoso pleaded guilty August 27 and is cooperating, according to the U.S. Attorney's Office; Sarris is presumed innocent, and the civil allegations against both are untested. For the venture market, it is a rare public account of how pre-IPO exposure is packaged, priced, and marketed to non-institutional investors.

Serebrin v. Ross — the Groq stockholder complaint (Del. Ch., C.A. No. 2026-1291-LWW)

Two former Groq engineers filed a combined class and derivative complaint, made public in redacted form in early October, against Groq's directors, an officer, and Groq, LLC as successor by conversion, challenging the December 2025 arrangement with Nvidia. The complaint alleges that the transaction was in substance a sale of the company structured as a non-exclusive $17 billion license — $13 billion at closing, $4 billion deferred — plus $3 billion in Nvidia restricted stock units for the engineers who moved with the technology, so as to avoid the stockholder vote Delaware law requires for a sale of substantially all assets; that a June 2026 conversion to a limited liability company cashed out stockholders at a price (redacted in the public version) computed, as alleged, on a net-cash basis assigning little or no value to the operating business; that funds the complaint describes as conflicted reinvested in a $650 million June financing, and that an August financing implied a $3.5 billion valuation; and that the information statement identified no committee, negotiation, or pre-signing valuation. Nvidia is not a defendant. Groq has called the suit meritless, as reported; no response had been filed as of the cutoff, and a reported Justice Department inquiry is separate from this case. Nothing has been decided.

Aerosonic v. Joby Aero — a $116.9 million trade-secret verdict (M.D. Fla., No. 8:25-cv-00554)

On October 2, a federal jury in Tampa found that air-taxi developer Joby Aero breached a 2021 nondisclosure agreement with probe supplier Aerosonic and willfully misappropriated its air-data-probe trade secrets, awarding about $116.9 million — roughly $68.6 million for the breach, $29.9 million under the Defend Trade Secrets Act, and $18.3 million in exemplary damages, as reported — and rejected Joby's counterclaim that the probes were defective. Aerosonic alleged that Joby used drawings, test data, and models received under the agreement to develop its own probes. Joby has said it strongly disagrees with the verdict, independently developed its air-data system, and has asked the court to overturn it. A jury verdict is not a final judgment — but for hardware-intensive venture-backed companies, a supplier confidentiality agreement can plainly carry nine-figure exposure.

In brief — SEC v. Güven and Kalder Inc. (S.D.N.Y., No. 26 Civ. 8716, filed Oct. 2)

The SEC alleges that a New York loyalty-software startup and its founder raised about $6.7 million from about fifteen investors, including venture firms, in a 2024 seed round using a second set of books that showed revenue several times the bookkeeper's figures, and brands presented as customers that were on discounted pilots or free demo accounts, or had no agreement at all. The founder, who pleaded guilty to one securities-fraud count in a parallel criminal case in May, consented, without admitting or denying the allegations, to a judgment, subject to court approval, that includes a six-year officer-and-director bar, with monetary relief deferred.

In re Saama Technologies Litigation — an earnout pursued into a loyalty breach (Del. Ch. Sept. 28, 2026, C.A. No. 2022-1045-LWW)

A post-trial decision on the founder's side of a sponsor-led control sale. In 2021 Carlyle acquired a 62 percent stake in clinical-data software company Saama at a $435 million enterprise value, with an earnout of up to $67.5 million conditioned on a 2021 revenue threshold and qualifying subscription bookings. Founder Suresh Katta, who stayed on as chief executive, sued when Carlyle objected to the earnout statement. After a five-day trial, Vice Chancellor Will found the objection substantively correct and made in good faith: “a desire to avoid an earnout payment is not bad faith, provided Carlyle honestly believed its objections were warranted.” On the counterclaims, the court found Katta singularly focused on the earnout — abandoning pricing discipline, rewriting contracts to inflate qualifying bookings, and selling products that could not be delivered or did not yet exist. That, the court wrote, “was not a flawed business strategy; it was bad faith.” It rejected the earnout claim and awarded Saama $7,300,172 plus interest for Katta's breach of the duty of loyalty as an officer; his claims against two Saama officers also failed. For founders and sponsors, the decision marks where pursuit of a contingent payment becomes disloyalty — and shows a buyer's good-faith objection tested on its merits rather than presumed.

When is a license a sale? The stockholder-vote question in the license-and-hire structure

The Groq complaint puts in play a question the license-and-hire structure, now common in AI, has so far avoided: when a company licenses its core technology to an acquirer that hires the team that built it, has it sold substantially all of its assets within the meaning of Section 271 of the Delaware General Corporation Law — which requires a stockholder vote — though no merger occurs? The Court of Chancery has long asked whether the assets are quantitatively vital to the corporation, whether the sale is out of the ordinary, and whether it substantially affects the corporation's existence and purpose, and a later Chancery decision read “substantially all” to mean what it says. A non-exclusive license of technology the company retains, paired with the departure of most of its engineers, does not fit the historical fact patterns — which is why the structure has been attractive, and why a court's application of the test to it would be consequential. The complaint also invokes Section 266, which governs conversions. No court has ruled on any of this in Groq's case; the motion practice remains to be developed.

Linqto and Groq — responsive pleadings • Aerosonic v. Joby — post-trial motions • Flexport v. Freightmate AI (N.D. Cal., No. 3:25-cv-02500) — resolved by stipulated judgment, as reported, with no liability findings • Cloudflare — decision pending after the August 12 hearing (Issue No. 7) • TSVC — preliminary-injunction motion pending (Issue No. 3) • ATP — recognition and funding orders and the district-court appeal (Issue No. 5) • Musk v. OpenAI — the request for an appealable judgment (Issue No. 4) • SEC v. Gao — proceedings on proposed final relief (Issue No. 2).