The U.S. Securities and Exchange Commission (SEC) has charged the operator of an alleged boiler room broker in connection with a scheme that raised US$74 million from investors for investment funds that promised access to pre-IPO shares.
In a filing on Friday in the U.S. district court for the Southern District of New York, the SEC charged Andrew Spaventa and three companies that he controlled — the Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC — with fraud in a series unregistered securities offerings.
According to the SEC’s complaint, between December 2020 and June 2025, the scheme raised over US$74 million from retail investors for 11 private investment funds that promised investors high returns from the opportunity to access cheap shares in companies before they went public.
However, the SEC alleged that the funds purchased pre-IPO shares from TSG at large markups, averaging 46% above the prices that TSG paid to acquire the shares — and that these markups were passed along to investors in the form of hidden fees.
The regulator alleged that the firms collected approximately US$23 million in undisclosed fees from investors.
“As for fund investors, the vast majority have not recouped their investments and some have already incurred total or near-total losses,” the complaint said.
The SEC charged all of the defendants with violating securities laws and registration requirements. It seeks permanent injunctions, disgorgement with interest, and civil penalties against them, and conduct-based injunctions against Spaventa.
The allegations have not been proven.