More than 800 people, many of them retirees, thought they had found a way into some of the most sought-after private companies in the country before Wall Street ever got the chance to buy in. The Securities and Exchange Commission alleges that what they actually got were shares marked up by tens of millions of dollars in never-disclosed fees, sold to them by a boiler room that collected more than $74 million from investors over roughly four and a half years. The SEC’s civil complaint, filed August 14, 2026 in the U.S. District Court for the Southern District of New York, names New York resident Andrew Spaventa and three companies he owned and controlled: The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC. These are allegations in a pending case, and none of them has been proven in court.
How the boiler room priced its pre-IPO funds
According to the complaint, Spaventa and his companies raised the $74 million between December 2020 and June 2025 across eleven private investment funds, each built around a single company’s pre-IPO shares — names investors would recognize, including SpaceX, Anduril, Stripe, Anthropic, Perplexity, Rubrik, and Epic Games. Investors did not buy stock in those companies directly. They bought membership interests in whichever fund held, or planned to acquire, that company’s private shares. The SEC alleges that more than 100 sales agents working out of Spaventa’s call centers cold-called thousands of prospective investors, many of them retirees, using scripts that promised no upfront fees, or fees capped at 12.5 percent, on top of the share price.
The SEC alleges that promise did not hold up. Spaventa’s own entities bought the pre-IPO shares first, then resold those same shares to his funds at a markup, and that markup was folded into the price investors were quoted as a hidden fee. The complaint’s fund-by-fund pricing schedule lists this pattern across all eleven funds: Fund 2 investors, for example, paid $70 for a Rubrik share the fund itself had just bought for $50, a 40 percent markup, and paid $975 for a SpaceX share bought for $595, a 64 percent markup.
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The arithmetic behind a 46 percent markup
Across all eleven funds, the SEC says the average markup on the pre-IPO shares ran about 46 percent over what Spaventa’s entities had paid for them, and that the defendants collected roughly $23 million in these hidden fees. The SEC’s announcement states that more than $12 million of that money went to sales agents as commissions, and about $4 million went to Spaventa personally, which the complaint alleges he spent on items including luxury car payments and home renovations.
Run the numbers the SEC itself published and the scale comes into focus. On $74 million raised against roughly $23 million in alleged markup, close to 31 cents of every dollar an investor wired into a fund went toward that markup rather than toward the pre-IPO stake itself. Applied to a single fund’s pricing: a retiree who wired $10,000 into Fund 2 to buy Rubrik shares at the quoted $70-per-unit price would have received about 143 units. Priced at the $50 per unit Spaventa’s own entity had just paid days earlier, the same $10,000 would have bought about 200 units — nearly 30 percent more shares for identical money. The complaint alleges that the higher, marked-up price was represented to investors as the shares’ market value, not as a fee.
Why pre-IPO shares are hard to value and hard to resell
Part of what let a markup like that pass unnoticed is how pre-IPO investing works in the first place. Buying a stake in a company before it goes public means buying shares that do not trade on any stock exchange and have no daily quoted price. The SEC’s own investor alert on pre-IPO offerings warns that these deals are often not registered with the agency at all, that unregistered securities offerings aimed at the general public may be illegal outright, and that the underlying company may never go public, may never develop a resale market, and investors could lose their entire investment with no way to sell out early.
That absence of an independent market price is exactly what, the SEC alleges, gave Spaventa’s operation room to work. With no exchange listing to check a quote against, the number investors saw was whatever price the funds themselves assigned — and the complaint alleges that number already included the markup nobody disclosed.
The red flags the SEC has published for this exact pitch
The SEC’s investor-education material lists warning signs for a pre-IPO pitch turning into a scam, and the Spaventa complaint alleges nearly all of them were present here: unregistered sales agents, a boiler room cold-calling from purchased contact lists, pitches tied to trending sectors such as artificial intelligence and space technology, and pressure built around scarcity or urgency.
The complaint alleges that Spaventa’s sales agents told prospective investors that remaining shares were nearly sold out, regardless of how many units were actually available, and touted prior returns ranging from 200 percent to 1,000 percent with no basis for the claim. Investors can use the SEC’s free background-check tool to confirm, before wiring any money, whether a person soliciting an investment is registered at all.
Where the Spaventa case stands now
The SEC’s complaint is a civil filing, not a criminal charge, and it asks the court for a permanent injunction against future violations, an order barring Spaventa from acting as a broker, dealer, or investment adviser, disgorgement of the money the defendants took in plus interest, and civil penalties. A jury trial has been demanded. None of the allegations have been decided by a court, and the defendants have not been found liable for anything as of this writing.
The complaint states that the vast majority of the fund investors have not recouped their investments, and that some have already incurred total or near-total losses on money that, in many cases, came from retirees looking for one more source of retirement income.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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