The Securities and Exchange Commission has accused a Long Island investment firm of operating a boiler room that raised $74 million from more than 800 people, many of them retirees, by pitching shares of high profile private companies like SpaceX, Anthropic, and Perplexity while collecting hidden markups.
The SEC’s complaint, filed Friday in the Southern District of New York, alleges that The Spaventa Group (TSG) and its founder Andrew Spaventa used a sales force of over 100 agents to cold call thousands of prospective investors. The agents followed scripted pitches that promised no hidden fees for shares in some of the world’s most exclusive private technology companies. More than 800 investors bought in. The majority were retail investors, with over 650 putting in $100,000 or less, and more than 100 were retirees.
According to the complaint, TSG raised more than $74 million across 11 private funds from December 2020 to June 2025, operating from offices on Long Island and New Jersey. But despite the repeated promises of no “unnecessary fees,” investors paid an average of 46% more for their positions than Spaventa’s own companies had paid to acquire them. In some cases, the premium reached as high as 91%, and investors allegedly had no idea how much they were being overcharged.
“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.
The SEC claims that the accused companies and Spaventa collected $23 million in undisclosed fees, including more than $12 million paid as commissions to the sales agents. Spaventa himself allegedly made at least $4 million, which he spent on a home purchase, renovations, personal travel, and luxury car payments. Reached by phone, Spaventa, who is 40, denied the allegations and said he plans to defend himself. The SEC charged him and three entities he controls, TSG, TSG Capital Advisors, and TSG Alpha Partners, with fraud and violations of securities registration and broker-dealer registration provisions.
The SEC said the investments all flowed through Spaventa. TSG and another company he owned, TSG Invest Ventures, allegedly bought the positions first and then resold them to Spaventa’s funds at higher prices, with the funds passing those costs on to investors. The complaint gives several examples: Fund 8 held Anthropic, acquired at $32.62 to $41.53 per share and sold for $58.50, a markup of 41% to 79%, raising $5.8 million in 2024. Funds 10 and 11 held Perplexity AI, bought between $340.72 and $389 and sold at $495, for a markup between 27% and 45%. Fund 2 held SpaceX, purchased for $595 and sold for $975. Anduril appeared across three funds with markups between 29% and 57%. None of these companies are accused of wrongdoing, and none responded to a request for comment. The more than 13 pre-IPO companies listed in the complaint also included Stripe, Rubrik, Epic Games, and Impossible Foods.
The SEC said Spaventa was the sole owner of the company selling the shares to the funds, and the funds were managed and advised by entities he owned and controlled. Because of this structure, he needed written client consent, which he allegedly never obtained. The funds also had no board of directors that could consent to certain transactions and no third party to evaluate purchases and transfers to ensure arm’s length deals. The SEC also alleges Spaventa backdated some fund equity transfer agreements after SEC staff began an inquiry in 2023.
Spaventa also allegedly coached his sales team, many of whom were not registered while several had been previously suspended or barred by regulator Finra. They earned commissions of about 10%, but a handbook Spaventa approved told them never to use the word “commission” and to say “referral fee” instead. When a prospect asked what the fund paid for shares, agents were allegedly coached to say, “I’m not sure, but that’s not information I’m privy to.” The handbook also directed agents to offer phony descriptions of fees, such as: “Unlike other firms, we have no hidden fees. So the price we tell you is the price of the investment.” For Anduril, the script told agents to say, “When you make money, we make money. If you don’t make money, we don’t make money.” But the markup was allegedly collected from investor money as soon as the investment closed.
Additionally, agents allegedly cited returns of 200% to 1,000% and mentioned a track record with Airbnb, Palantir, and SoFi, even though the funds never held any of those investments. TSG’s marketing claimed the firm bought existing shares directly from shareholders and insiders looking to sell, without diluting the company. However, the SEC said that more than 90% of the funds’ holdings were stakes in other private pre-IPO funds that allegedly held these shares, adding a second layer of fees and additional risk.
Spaventa has not yet filed a response in court. The SEC is seeking disgorgement, civil penalties, and a permanent bar from the securities industry. According to the complaint, the majority of investors have not recouped their investments.
