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

The Securities and Exchange Commission has accused Andrew Spaventa, a New York resident, and three entities he controlled of fraud and other violations in a $74 million pre-IPO investment scam targeting retail investors. According to the SEC, between early 2020 and mid-2025, Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC raised over $74 million from more than 800 investors across the United States for eleven private funds.

Spaventa allegedly purchased pre-IPO shares and sold them at marked-up prices to his funds, passing on hidden fees to investors. The SEC claims that Spaventa and his entities used over 100 sales agents to cold call thousands of potential investors, including many retirees, with high-pressure sales tactics. The defendants falsely assured investors they would pay little or no upfront fees, while the actual costs were an average of 46% higher than what Spaventa paid for the investments.

As a result, the defendants collected around $23 million in upfront fees, with more than $12 million going to their sales agents and approximately $4 million to Spaventa personally. The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, seeks injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties from all defendants, as well as conduct-based injunctions against Spaventa.