Cold Calls, 'No Upfront Fees' and a 46% Markup: SEC Sues Alleged Pre-IPO Boiler Room Operator Over $74 Million Raise

Published Oct. 12, 2026. Case statuses are current as of that date, based on SEC records.

The phone call offered a chance most retail investors never get: shares in hot private companies before they go public. According to the Securities and Exchange Commission, the price of that chance was far higher than investors were told.

On Aug. 14, 2026, the SEC sued New York resident Andrew Spaventa and three entities it says he owned and controlled, The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC, alleging fraud and registration violations in unregistered offerings of 11 private funds marketed as a way into "pre-IPO" companies [1].

What the SEC alleges

According to the complaint, filed in the U.S. District Court for the Southern District of New York [1][2]:

• Scale. Between about December 2020 and June 2025, the defendants raised more than $74 million from more than 800 mostly retail investors across the United States.
• The structure. Through entities he owned, Spaventa bought pre-IPO shares directly or through another fund, then sold them in principal transactions to his funds at marked-up prices. Those markups were passed on to investors as hidden fees.
• The sales force. More than 100 "sales agents" cold-called thousands of prospective investors, many of them retirees, using high-pressure tactics.
• The fee claims. Investors were allegedly told they would pay no upfront fees, or at most 12.5%. The SEC says the prices they paid were on average about 46% higher than what Spaventa paid.
• Where the money went. The SEC alleges the defendants collected about $23 million in upfront fees, of which more than $12 million went to sales agents as commissions and about $4 million went to Spaventa personally.

"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 [1].

The charges

The complaint charges the defendants with violating the antifraud, securities registration and broker-dealer registration provisions of the Securities Act, the Exchange Act and the Investment Advisers Act, and charges Spaventa with control-person liability and aiding and abetting. The SEC seeks permanent injunctions, disgorgement with interest, civil penalties and conduct-based injunctions against Spaventa [1][3].

The press release does not mention a settlement or a parallel criminal case, and we found no later judgment on sec.gov as of Oct. 12, 2026. The allegations have not been proven. We found no public response from Spaventa in the SEC materials.

The pre-IPO pitch

Pre-IPO investing is a recurring theme in SEC cases. The shares are hard to value, hard to sell and hard to verify, which makes it easy to bury markups in the price. The SEC has published an investor alert on pre-IPO offerings, linked from its release [1].

What an SEC civil case is (and isn't)

The SEC is a civil regulator. When it "charges" someone, it files a lawsuit in federal court or brings an administrative proceeding asking for remedies such as injunctions, repayment of allegedly ill-gotten gains (disgorgement), civil money penalties and industry bars. It cannot send anyone to prison. Criminal charges, when there are any, are brought separately by federal prosecutors, and a defendant in a criminal case is presumed innocent unless and until proven guilty.

Allegations in an SEC complaint are claims the agency must prove in court unless a defendant settles. When a defendant settles "without admitting or denying" the allegations, the court or the Commission enters an order, but the defendant has not conceded that the allegations are true. Throughout this article, statements about what happened are allegations or findings as described by the SEC, not established facts, unless we say a court entered a judgment or a defendant pleaded guilty.

Red flags in this case

• An unsolicited call offering 'exclusive' access to pre-IPO shares of famous companies.
• Claims of 'no upfront fees' with no clear statement of what the fund paid for the shares.
• Pressure to commit quickly before an 'allocation' disappears.
• Sales agents who are not registered brokers (check BrokerCheck).

How to check an investment before you hand over money

• Look up the person and the firm on Investor.gov and FINRA BrokerCheck. A clean search is not proof of legitimacy, but a missing or mismatched record is a reason to stop.
• Read the offering documents yourself, and ask a fee-only professional you found independently to read them too.
• Be skeptical of "guaranteed" or fixed high returns. Real investments carry risk, and promises of safety plus high yield are a classic warning sign.
• Be wary of pressure. Deadlines, "limited allocations" and repeated calls are sales tactics, not investment analysis.
• Don't let trust in a group replace due diligence. Fraud often spreads through churches, ethnic and professional communities, online chat groups and friends-of-friends referrals.

If you think you were affected

1. Keep everything: account statements, emails, texts, wire and payment records, and any marketing material.
2. Report it to the SEC at sec.gov/tcr. If a criminal case is involved, you can also contact the FBI at ic3.gov or the prosecutors' victim-witness office.
3. Watch for a receiver or fair fund. In some SEC cases, money is later returned to harmed investors through a court-appointed receiver or a distribution fund. Notices are posted on sec.gov.
4. Beware of "recovery" offers. People who lost money are often targeted again by scammers promising to recover it for an upfront fee. Legitimate receivers and the SEC do not charge you to file a claim.

Case status (as of Oct. 12, 2026)

Defendant	Court	Status as of Oct. 12, 2026	Source
Andrew Spaventa, New York	U.S. District Court, S.D.N.Y. (SEC civil)	Sued Aug. 14, 2026; litigation pending; no settlement or judgment found on sec.gov	[1], [3]
The Spaventa Group LLC; TSG Capital Advisors LLC; TSG Alpha Partners LLC	U.S. District Court, S.D.N.Y. (SEC civil)	Sued Aug. 14, 2026; litigation pending	[1], [3]

Statuses can change. SEC allegations are claims, not findings of wrongdoing, unless a court has ruled.

Sources

1. SEC Press Release 2026-75, "SEC Charges Boiler Room Operator and Three Entities with Defrauding Retail Investors in $74 Million Pre-IPO Investment Scam," Aug. 14, 2026. https://www.sec.gov/newsroom/press-releases/2026-75-sec-charges-boiler-room-operator-three-entities-defrauding-retail-investors-74-million-pre-ipo
2. SEC complaint, SEC v. Spaventa et al. (S.D.N.Y.). https://www.sec.gov/files/litigation/complaints/2026/comp-pr2026-75.pdf
3. SEC Litigation Release No. 26611, Aug. 17, 2026. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26611

---

Corrections and updates: If you are named in this article, or represent someone who is, and believe anything here is inaccurate or out of date (including a dismissal, judgment, settlement or change in case status), please contact us at editorandchief@scammers.com. We will review it and update the article promptly.