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.”
As alleged, Spaventa and the entities he controlled solicited these investments using over 100 “sales agents” to cold call and pitch the funds to thousands of prospective investors, many of them retirees, using high-pressure sales tactics. The defendants falsely told investors that they would pay either no upfront fees at all or upfront fees of at most 12.5%, when in reality, the prices investors paid were on average approximately 46% higher than the prices Spaventa paid for the investments. As a result of their fraud, the defendants collected approximately $23 million in upfront fees from unsuspecting investors – of which more than $12 million was funneled to their sales agents for commissions and approximately $4 million went to Spaventa personally.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges defendants with violating the antifraud, securities registration, and broker-dealer registration provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. It also charges Spaventa with control person liability and aiding and abetting violations. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains and prejudgment interest, and civil penalties from all of the defendants, and conduct-based injunctions against Spaventa.
Investors can learn more about the risks of investing in pre-IPO offerings in this Investor Alert .