Fintech firm Longfin Corp. has been ordered to pay almost $6.8 million after a court backed charges brought by the U.S. Securities and Exchange Commission (SEC) that it committed fraud relating to its public offering and Nasdaq listing.

An SEC announcement on Monday indicated that the district court for the Southern District of New York entered a default judgment against Longfin, ordering the firm to repay $3,532,235 – all the proceeds raised in Longfin’s 2017 Regulation A+ offering, plus interest. The company has also been fined $3,243,613.

The SEC claimed in June that Longfin and its CEO, Venkata S. Meenavalli, had falsely stated in an application to the SEC for the offering that the company was largely managed and operated in the U.S. when that was not actually the case.

They also gave away over 400,000 Longfin shares to “insiders and affiliates,” allowing them to fake the number of qualifying shareholders and shares sold in the offering to pass the threshold for listing on Nasdaq.

The SEC also claimed that Longfin and Meenavalli fabricated $66 million in revenue from “sham” commodities transaction – a sum that represented over 90 percent of the firm’s total reported revenue for 2017.

The case is still ongoing, according to the regulator, as is a related criminal action brought by the U.S. Attorney’s Office for the District of New Jersey.

The SEC said it will set up a “fair fund” to refund “harmed” Longfin investors with the money returned by Longfin. The company voluntarily delisted from Nasdaq in May 2018 and shut down in November 2018.

SEC image via Shutterstock