Boiler Room Scammer Raked In $74 Million Pre-IPO Ruse!

SEC v. Andrew Spaventa; The Spaventa Group LLC; TSG Capital Advisors LLC; TSG Alpha Partners LLC — U.S. Securities and Exchange Commission Litigation Release No. 26611, dated August 17, 2026.

The SEC charged Andrew Spaventa and three entities he controlled with defrauding over 800 retail investors out of $74 million. They allegedly used high-pressure sales tactics and charged hidden fees on pre-IPO investments, with markups averaging 46% and totaling $23 million in fees collected.

In Plain English

Imagine you want to buy a rare toy. Someone tells you they can get it for you, and it will cost $100, with maybe a small fee. But secretly, they buy it for $50 and then sell it to you for $100, pocketing the extra $50 as a hidden fee. This is what happened here, but with investments, and the hidden fees were much larger.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Setting Up the Scheme Andrew Spaventa, through his entities The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC, created eleven private funds between December 2020 and June 2025. These funds were pitched as opportunities to invest in shares of private companies before they went public (pre-IPO).
2. Acquiring Pre-IPO Shares Spaventa, using entities he owned, purchased shares in private companies. He would then sell these shares to his own investor funds at prices significantly higher than what he paid. These markups were a core part of the fraudulent scheme.
3. Charging Hidden Fees The marked-up prices of the pre-IPO shares were passed on to investors as hidden fees. The prices investors paid for membership interests in the funds were, on average, approximately 46% higher than the prices Spaventa originally paid for those shares.
4. Misleading Investors About Fees Sales agents, using scripts and handbooks, told prospective investors that they would pay either no upfront fees or at most 12.5% in upfront fees. This was a direct contradiction to the actual hidden fees embedded in the purchase prices.
5. Aggressive Sales Tactics Spaventa employed over 100 'sales agents' who cold-called thousands of potential investors, many of whom were retirees. These agents used high-pressure sales tactics to push the investments, as directed by Spaventa and his managers.
6. Raising Millions Through this fraudulent operation, Spaventa and his entities raised more than $74 million from over 800 mostly retail investors across the United States.
7. Collecting Fraudulent Fees The defendants collected approximately $23 million in upfront fees from these unsuspecting investors. These fees were a direct result of the inflated prices charged for the pre-IPO shares.
8. Personal Enrichment Of the $23 million in fees collected, more than $12 million was paid to sales agents as commissions. Andrew Spaventa personally pocketed approximately $4 million of these fees for personal expenses.

The Enforcement Action

On August 14, 2026, the SEC charged 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. 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.

Named in this action: Andrew Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, TSG Alpha Partners LLC.

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