SEC Charges Andrew Spaventa, Three Entities in Alleged $74 Million Pre-IPO Scam
SEC charges Andrew Spaventa and three entities over an alleged $74 million pre-IPO fraud targeting 800 investors with hidden fees and cold-call sales tactics.
Summary
In press release 2026-75 on Aug. 14, 2026, the SEC charged New York resident Andrew Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC over unregistered offerings of 11 private funds that purportedly invested in pre-IPO private-company shares. The complaint says they raised more than $74 million from over 800 mostly retail investors nationwide between approximately December 2020 and June 2025. Spaventa allegedly bought shares directly or through another fund, then resold them in principal transactions to his funds at markups embedded as hidden fees in membership interests.
More than 100 sales agents allegedly cold-called thousands of prospects, including many retirees, using high-pressure tactics. Investors were told upfront fees were zero or no more than 12.5%, but paid prices averaging approximately 46% above Spaventa’s costs. The defendants allegedly collected about $23 million in upfront fees, directing more than $12 million to agent commissions and approximately $4 million to Spaventa personally. Sheldon L. Pollock, associate director of the SEC’s New York Regional Office, warned that unsolicited calls, pressure tactics, and hidden fees characterize boiler rooms. The Southern District of New York complaint alleges antifraud, securities-registration, and broker-dealer-registration violations under the Securities Act of 1933, Exchange Act of 1934, and Investment Advisers Act of 1940, plus control-person and aiding-and-abetting liability for Spaventa. The SEC seeks permanent and conduct-based injunctions, disgorgement, prejudgment interest, and civil penalties, and linked an Investor Alert on pre-IPO risks.
Positives
- The SEC traced approximately $23 million in alleged upfront fees, including more than $12 million in commissions and about $4 million paid to Spaventa.
- Requested remedies include disgorgement, prejudgment interest, civil penalties, permanent injunctions, and conduct-based restrictions against Spaventa.
- An SEC Investor Alert accompanying the Aug. 14, 2026 release explains risks associated with pre-IPO offerings.
Risks & concerns
- More than $74 million was allegedly raised from over 800 mostly retail investors through 11 unregistered private-fund offerings.
- Investors paid prices averaging approximately 46% above Spaventa’s costs despite being told upfront fees were zero or capped at 12.5%.
- Over 100 sales agents allegedly cold-called thousands of prospects, including many retirees, with high-pressure sales tactics.
- Approximately $23 million in alleged upfront fees reduced the capital investors effectively committed to the underlying pre-IPO shares.
- The complaint alleges violations of three federal securities laws, plus control-person and aiding-and-abetting liability for Spaventa.
