SEC Charges Boiler Room Operator and Three Entities with Defrauding Retail Investors in $74 Million Pre-IPO Investment Scam

The Securities and Exchange Commission today charged New York resident Andrew Spaventa and three entities he owned and controlled with fraud and other violations in connection with unregistered securities offerings of private funds that purportedly provided retail investors an opportunity to invest in shares of “pre-IPO” private companies while charging hidden fees.

According to the SEC’s complaint, between approximately December 2020 and June 2025, Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC raised more than $74 million from more than 800 mostly retail investors across the United States for eleven private funds. Through entities he owned, Spaventa purchased the pre-IPO shares, either directly or through another investment fund, and then sold them in principal transactions to his funds at marked-up prices. These markups were then passed on to investors in the form of hidden fees charged on the sale of membership interests in the funds.

“Unsolicited calls and high-pressure sales tactics are the calling cards of so-called boiler room operators. They get you on the phone and then hit you with the hidden fees,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “We encourage investors to be vigilant when it comes to these types of tactics.”