TITLE: U.S. Securities and Exchange Commission Charges Operator with $74 Million Pre-IPO Investment Fraud
BODY:
On August 14, 2026, the U.S. Securities and Exchange Commission (SEC) filed a civil enforcement action in the U.S. District Court for the Southern District of New York against Andrew Spaventa, a New York resident, and three entities he owned and controlled: The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC. The SEC alleges that the defendants defrauded more than 800 retail investors across the United States through unregistered securities offerings of private funds purporting to provide investment opportunities in pre-initial public offering (IPO) shares of private companies.
According to the SEC's complaint, between December 2020 and June 2025, the defendants raised more than $74 million from retail investors, including many retirees, for eleven private funds. Spaventa purchased pre-IPO shares either directly or through another investment fund, then sold them to his funds at marked-up prices. These markups were passed to investors as hidden fees charged on the sale of membership interests. The defendants allegedly solicited investments using over 100 sales agents who employed high-pressure cold-calling tactics to pitch the funds to prospective investors. The complaint alleges that Spaventa and his entities falsely represented that investors would pay no upfront fees or upfront fees of at most 12.5 percent, when in reality, investors paid prices approximately 46 percent higher than Spaventa's acquisition costs. The scheme generated approximately $23 million in upfront fees, of which more than $12 million was distributed to sales agents as commissions and approximately $4 million went to Spaventa personally.
The SEC charges the defendants with violating antifraud, securities registration, and broker-dealer registration provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and conduct-based injunctions against Spaventa. The SEC's New York Regional Office is leading the litigation.