Scripted Pitches, Hidden Markups, and $74 Million Raised
The Securities and Exchange Commission filed a fraud complaint Friday in the Southern District of New York against Andrew Spaventa, 40, and three entities he controls — The Spaventa Group (TSG), TSG Capital Advisors, and TSG Alpha Partners — alleging the Long Island financial firm ran a classic boiler-room operation dressed up in Silicon Valley glamour.
According to the SEC, a sales force of more than 100 agents cold-called thousands of prospective investors with scripted pitches for pre-IPO shares in SpaceX, Anduril, Anthropic, and Perplexity. Over four and a half years, from December 2020 to June 2025, the operation raised more than $74 million across 11 private funds. More than 800 people bought in. Over 650 invested $100,000 or less. More than 100 were retirees.
The Markup Machine
The numbers are stark. Investors paid on average 46% more for their positions than Spaventa's own companies paid to acquire them, the SEC alleged. In some cases the premium reached 91%. All told, the SEC claims the accused companies and Spaventa collected $23 million in undisclosed fees. More than $12 million of that went to sales agent commissions. Spaventa himself allegedly made at least $4 million, which he spent on a home purchase, renovations, personal travel, and luxury car payments, according to the complaint.
The structure was straightforward: TSG and a Spaventa-owned entity called TSG Invest Ventures allegedly bought the pre-IPO positions first, then resold them to Spaventa's funds at a higher price, which the funds passed on to investors. The SEC said Spaventa was the sole owner of the selling entity and also managed and advised the buying funds — a conflict that required written client consent he allegedly never obtained.
Specific markups cited in the complaint: Anthropic shares acquired at $32.62 to $41.53 per share were sold to investors at $58.50, a 41% to 79% markup that raised $5.8 million in 2024. Perplexity AI was bought between $340.72 and $389 and sold at $495, a 27% to 45% premium. SpaceX was purchased at $595 and sold at $975. Anduril appeared across three funds at markups between 29% and 57. None of the underlying companies are accused of wrongdoing.
'No Hidden Fees' — The Script Said So
The SEC's complaint details an internal handbook Spaventa allegedly approved that coached agents never to use the word 'commission' — substituting 'referral fee' instead. When investors asked what the fund paid for shares, agents were allegedly directed to say, 'I'm not sure, but that's not information I'm privy to.'
The pitch was explicit: 'Unlike other firms, we have no hidden fees. So the price we tell you is the price of the investment.' Several agents were not registered; others had previously been suspended or barred by Finra. The SEC also alleged Spaventa backdated some fund equity transfer agreements after SEC staff began an inquiry in 2023.
Reached by phone, Spaventa denied the allegations and said he planned to defend himself.
'Unsolicited calls and high-pressure sales tactics are the calling cards of so-called boiler room operators,' said Sheldon L. Pollock, associate director of the SEC's New York regional office.
The Market Verdict
This case is a reminder that the hottest brand names in private markets — SpaceX, Anthropic, Perplexity — can be weaponized against the very retail investors who most want exposure to them. The promise of pre-IPO access is powerful precisely because legitimate access is scarce. When that scarcity is exploited through hidden markups and coached deception, the victims are not abstract: they are retirees who trusted a cold call.
Free markets depend on honest price discovery and informed consent. The SEC's enforcement action, whatever its ultimate outcome in court, underscores a principle this outlet holds without apology: fraud is not a market failure — it is a crime. Capital formation works when the rules are clear and enforced. The administrative state earns its keep on days like this one.
