The Securities and Exchange Commission has charged Long Island financier Andrew Spaventa and three companies he controlled with running a boiler room that raised more than $74 million from over 800 retail investors through hidden fees on pre-IPO investment funds. The complaint, filed August 14, 2026 in the Southern District of New York, alleges investors were told they would pay little or nothing in upfront fees while actually bearing markups that averaged 46 percent.
What happened
Spaventa, 40, of Miller Place, New York, founded The Spaventa Group LLC in September 2020 after years of selling pre-IPO investments at other firms. Between December 2020 and June 2025, he and two affiliates, TSG Capital Advisors LLC and TSG Alpha Partners LLC, raised the money for eleven private funds pitched as vehicles for buying shares of SpaceX, Anthropic, Anduril, and Perplexity before their anticipated public offerings.
Those private companies face no accusations of wrongdoing. The SEC case targets how access to their shares was priced and sold.
Key facts in the SEC complaint
| Metric | Alleged figure |
|---|---|
| Total raised | More than $74 million |
| Investors | More than 800, mostly retail |
| Private funds marketed | Eleven |
| Average hidden markup | 46 percent |
| Markup range | 27 to 91 percent |
| Undisclosed fees collected | About $23 million |
| Spaventa’s personal enrichment | At least $4 million |
| Commissions paid to sales agents | More than $12 million |
| Retirees among investors | More than 100 |
More than 650 investors put in $100,000 or less. Over 100 were retirees. The SEC states that most fund investors have not recouped their money and that some suffered total or near-total losses.
How the markup scheme worked
The funds did not buy pre-IPO shares directly. Spaventa caused two entities he wholly owned to acquire the shares, then resold them to his own funds in principal transactions, standing on both sides of each trade. The funds had no boards of directors, no investor advisory committee, and no third party evaluating whether the prices served investors.
The complaint cites one 2024 Anthropic transaction in which a Spaventa entity acquired shares at $32.62 to $41.53 and sold them to a fund at $58.50, a markup of 41 to 79 percent that raised $5.8 million. A SpaceX position carried a 64 percent markup, according to the filing.
More than 90 percent of the pre-IPO securities held by the funds were themselves stakes in other pre-IPO investment funds, adding an undisclosed second layer of fees. The SEC also alleges that fund equity transfer agreements were backdated after Commission staff opened an inquiry in 2023.
The boiler room operation
More than 100 commissioned sales agents worked the phones from Long Island and New Jersey offices, cold-calling thousands of prospects with high-pressure pitches. Most agents were not registered with FINRA, and several had prior suspensions or bars. An internal sales handbook instructed agents to describe their roughly 10 percent cut as a referral fee rather than a commission, according to the complaint.
Regulatory history and what happens next
Spaventa held Series 7, 24, and 65 licenses during his career as a registered broker. FINRA suspended him in 2019 for failing to pay an arbitration award tied to a customer complaint. The Spaventa Group itself was never registered with the SEC despite years of raising money from the public.
The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and a conduct-based injunction that would bar Spaventa from associating with any broker, dealer, or investment adviser. Spaventa has denied the allegations and stated he intends to defend the case in court.
Red flags investors can watch for
- Unregistered sellers: A five-minute check of FINRA’s BrokerCheck and the SEC’s adviser database would have shown the firm was never registered.
- Fee language games: Renaming a commission a referral fee is a signal that costs are being hidden.
- Principal trades without oversight: When the seller controls the buyer, written consent and independent checks are required.
- Liquidity promises: Pre-IPO shares have no public market, no set listing timeline, and no exit if the company never goes public.
Frequently asked questions
Who is Andrew Spaventa?
Andrew Spaventa is a 40-year-old former registered broker from Miller Place, New York, who founded The Spaventa Group LLC. The SEC charged him on August 14, 2026 with fraud tied to eleven pre-IPO investment funds.
How much did investors lose in the Spaventa pre-IPO scheme?
The SEC alleges more than $74 million was raised from over 800 investors, with roughly $23 million in undisclosed fees. Most investors have not recovered their principal, and some lost nearly everything.
What should investors who bought TSG fund interests do now?
Investors should preserve confirmation letters and account statements, verify the registration status of whoever sold them the interests, and ask a securities attorney to review recovery options.
Haselkorn & Thibaut fights for investor recovery
Haselkorn & Thibaut is a securities law firm founded by former Wall Street defense attorneys who shifted their practice to represent investors. The firm has recovered over $520 million for clients in securities matters and maintains a 98 percent success rate in resolved nontraded REIT cases. Attorneys are AV Preeminent rated through Martindale-Hubbell, designated as Super Lawyers, and hold a 5.0-star client review average. The firm operates on a contingency basis — no recovery, no fee.
Contact Haselkorn & Thibaut today
Time matters in investment fraud cases. The earlier you act, the stronger your position. The firm offers a free case evaluation to assess your losses, review your account history, and explain your options under arbitration or settlement.
- Main Phone: 1-888-885-7162
- website for a free consultation
Offices in Florida, New York, Arizona, Texas, and North Carolina. Former Wall Street defense attorneys with 95+ years of combined experience. No recovery, no fee.
This article is informational and does not constitute legal or investment advice. AlphaBetaStock.com is a news publisher and is not a law firm.
