SEC Probing Idealab Exemption Status
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Investors suing Pasadena-based Idealab said Thursday that the Securities and Exchange Commission has told them it is looking into the status of the tech incubator’s exemption from the Investment Company Act of 1940.
If Idealab’s exemption were rescinded, investors would be entitled to a full refund of the more than $700 million they put into the firm, Martin Lybecker, an attorney for the plaintiffs, said.
He said the plaintiffs recently were notified by the SEC that it began an informal inquiry of Idealab’s exemption in June.
An Idealab spokesman said the firm responded to information requests from the SEC in July and August, adding, “We have no reason to believe there is any problem.” The SEC could not be reached.
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