The numbers come first: 800 investors, more than 100 of them retirees, $74 million raised over four and a half years, and markups averaging 46% above what the firm itself paid for the underlying positions. That is the scale of the alleged fraud the Securities and Exchange Commission laid out last week against The Spaventa Group, a Long Island-based financial firm the regulator is calling a pre-IPO 'boiler room.'
The SEC's complaint, filed in the Southern District of New York, names former broker Andrew Spaventa as the central figure. According to the agency, Spaventa's operation deployed more than 100 agents making thousands of phone calls to sell shares in 11 private funds — funds that held positions in some of the most coveted names in private markets: Anduril, Anthropic, Perplexity, and SpaceX. The alleged scheme ran from December 2020 to June 2025.
The pitch, according to the SEC, included an explicit promise of no 'unnecessary fees.' Investors allegedly received the opposite. The commission claims buyers paid on average 46% more for their positions than Spaventa's own companies paid to acquire them. In some cases that premium reached 91%. More than 650 of the 800-plus investors put in $100,000 or less, making the alleged victims overwhelmingly retail — not institutional — participants.
Spaventa denied the SEC's claims when reached by phone, according to Fortune's Amanda Gerut, who broke the story.
The case is not the first of its kind this cycle. The SEC previously brought a case against Giovanni Pennetta, alleging he misappropriated $10 million in investor funds while selling fraudulent shares of companies including Anduril. Pennetta ultimately pleaded guilty to one count of wire fraud. The Spaventa case, if the allegations hold, represents a materially larger operation.
The backdrop matters. Private markets have swelled alongside the AI boom, and secondary trading in pre-IPO shares — largely unregulated — has created fertile ground for exactly this kind of alleged scheme. Retail investors, drawn by headline names and the fear of missing the next generational technology company, have poured capital into a market that lacks the disclosure requirements and investor protections that govern public equities.
CEO Times view: The free market runs on accurate price signals and honest dealing — two things the alleged Spaventa operation systematically denied its customers. Retirees and retail investors chasing exposure to private AI darlings deserve the same basic protection that public-market rules provide: transparent fees, honest markups, and no boiler-room pressure tactics. The SEC's willingness to pursue a case of this scale is the right call. The deeper lesson is structural: as private markets grow to rival public ones in investor appetite, the absence of mandatory disclosure is not a feature of free enterprise — it is an invitation to predators. Capital rewards clear rules, and right now the pre-IPO secondary market has too few of them.
