SEC charges boiler room behind $74M pre-IPO share scam

The SEC charged a New York boiler room operator and three entities he controlled with defrauding more than 800 retail investors out of $74 million through a pre-IPO share scheme, the agency announced on August 14.

According to the SEC, Andrew Spaventa and his firms, The Spaventa Group, TSG Capital Advisors, and TSG Alpha Partners, bought pre-IPO shares at market rates and then resold them to private funds he controlled at significantly inflated prices. Those markups were never disclosed as such; instead, they were folded into what looked like ordinary fund membership fees, hiding the actual cost investors were paying above market price. More than 100 sales agents made unsolicited cold calls using aggressive tactics, and the SEC says the operation targeted retirees in particular.

The scheme ran from December 2020 through June 2025. Of the $74 million raised, roughly $23 million went to upfront fees and more than $12 million went out as sales commissions to the cold-calling agents, while Spaventa personally received about $4 million. The SEC's complaint alleges violations of the antifraud and registration provisions of the Securities Act, the Securities Exchange Act, and the Investment Advisers Act, along with control-person liability and aiding-and-abetting charges against the entities. The agency's press release doesn't mention any parallel criminal charges as of publication, and it doesn't specify whether Spaventa or the entities have responded publicly to the allegations.

“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.”

— Sheldon L. Pollock, Associate Director, SEC New York Regional Office

• Andrew Spaventa and three entities he controlled face SEC fraud charges over a pre-IPO share scheme
• $74 million raised from 800+ retail investors between December 2020 and June 2025
• Markups on pre-IPO shares were disguised as hidden fund membership fees
• Over 100 sales agents cold-called investors, targeting retirees in particular
• ~$23M went to upfront fees, $12M+ to sales commissions, ~$4M personally to Spaventa

The mechanics here, real pre-IPO shares bought cheap and marked up through fees investors couldn't see, sit apart from the affinity-fraud pattern the SEC flagged in a separate case earlier this month, where a trio in Toms River, New Jersey allegedly used community trust rather than cold calls to raise $47 million. Both cases share the same underlying draw, though: access to a deal ordinary investors can't easily get on their own. That appetite for pre-IPO exposure is real and growing through legitimate channels too, as platforms like Coinbase now let retail users trade pre-IPO exposure to companies like OpenAI and Anthropic before either goes public. The SEC's case against Spaventa is a reminder that the same appetite, when it isn't channeled through a transparent, regulated product, is exactly what boiler rooms are built to exploit. The difference between the two rarely shows up on a first cold call or a slick pitch deck; it comes down to whether the markup on the shares is disclosed upfront and whether the seller is actually registered to sell them at all.

Nothing here should be taken as financial advice — just information to consider.