US charges two former Linqto CEOs over $450 million 'pre-IPO' fraud scheme, one pleads guilty

JUST IN: US charges two former Linqto CEOs over a $450 million 'pre-IPO' fraud scheme, with one pleading guilty.

Four hundred and fifty million dollars. That's the size of the fraud US prosecutors say two former Linqto CEOs ran, and one of them has already pleaded guilty.

Linqto was the platform that promised ordinary investors a way into pre-IPO shares, a piece of hot private companies before they ever hit the exchange. The Justice Department says the whole pitch was rotten, that customers were sold something very different from what they thought they owned.

And here's what gets me. Pre-IPO investing was already the wild west, no public filings, no real price discovery, just trust. This case says the trust was the product, and it was fake. A guilty plea this early usually means one thing, someone is cooperating, and that tends to make the second defendant's lawyers very busy.

Half a billion dollars in, and the customers still don't know what their shares were ever worth.

This is Sara White, reporting for HIT.