A recent complaint filed by the Securities and Exchange Commission in the Southern District of New York alleges a sophisticated “boiler room” operation that funneled more than $74 million from over 800 investors, many of them retirees, into private tech companies like SpaceX, Anduril, Anthropic, and Perplexity. The firm at the center of these accusations, The Spaventa Group (TSG), founded by Andrew Spaventa, is charged with fraud and violating securities regulations, with the SEC claiming investors paid significantly marked-up prices for shares they were told had no hidden fees.
The alleged scheme, spanning four and a half years from December 2020 to June 2025, involved a sales force exceeding 100 agents. These agents reportedly cold-called thousands of potential investors, using polished, scripted pitches that explicitly promised transparency regarding fees. Despite these assurances, the SEC contends that investors paid, on average, 46% more for their positions than Spaventa’s own companies had paid to acquire them. In some instances, this premium reportedly soared as high as 91%, with investors allegedly unaware of these substantial markups. Sheldon L. Pollock, associate director of the SEC’s New York regional office, highlighted the use of unsolicited calls and high-pressure tactics as hallmarks of such operations.
According to the regulatory body, the accused entities and Spaventa collectively siphoned $23 million in undisclosed fees. A significant portion of this, over $12 million, reportedly went to commissions for the sales agents making the calls, while Spaventa himself is alleged to have profited by at least $4 million. These funds were purportedly used for personal expenses, including a home purchase, renovations, travel, and luxury car payments. Spaventa, 40, has denied the allegations and indicated he plans to defend against the SEC’s accusations. The complaint names Spaventa along with three entities he controls: TSG, TSG Capital Advisors, and TSG Alpha Partners.
The intricate structure of the alleged operation saw investments flow entirely through Spaventa’s control. TSG and another of his companies, TSG Invest Ventures, reportedly acquired positions first, then resold them at inflated prices to funds also managed and advised by Spaventa’s entities. For example, the SEC complaint details Fund 8’s acquisition of Anthropic shares, bought for $32.62 to $41.53 per share and then sold for $58.50, representing a markup ranging from 41% to 79%. Similarly, Perplexity AI shares were allegedly bought between $340.72 and $389 and sold for $495, yielding a 27% to 45% markup. SpaceX shares, acquired for $595, were reportedly resold for $975. Anduril appeared across three funds with markups between 29% and 57%. Other prominent pre-IPO companies listed in the complaint include Stripe, Rubrik, Epic Games, and Impossible Foods, none of which are accused of wrongdoing.
Regulators emphasize that Spaventa, as the sole owner of the company selling shares to the funds and also controlling the funds themselves, required written client consent for these transactions, which he allegedly never obtained. Furthermore, the funds reportedly lacked a board of directors to approve such deals or a third party to evaluate purchases, ensuring arm’s length transactions. The SEC also claims Spaventa backdated some fund equity transfer agreements after the inquiry began in 2023. The sales team, many unregistered and some with prior regulatory suspensions or bars, was allegedly coached by Spaventa. A handbook reportedly instructed them to use “referral fee” instead of “commission” and to deny knowledge of share acquisition costs if asked by prospects. Agents were also allegedly told to falsely claim “no hidden fees” and that “the price we tell you is the price of the investment.”
The marketing materials for TSG reportedly stated the firm bought shares directly from existing shareholders, avoiding dilution. However, the SEC indicates that over 90% of the funds’ holdings were actually stakes in other private pre-IPO funds that claimed to hold these shares, adding a second layer of fees and additional risk. As of the complaint’s filing, the majority of investors have not recouped their investments. The SEC is seeking disgorgement, civil penalties, and a permanent bar from the securities industry for Spaventa.
