SEC sues Long Island firm for $74M boiler room scheme selling private tech shares

The Securities & Exchange Commission filed a civil fraud complaint on Friday in the Southern District of New York against The Spaventa Group (TSG), founder Andrew Spaventa, and three entities he controls—TSG Capital Advisors and TSG Alpha Partners. The agency alleges they operated a boiler room scheme from Long Island and New Jersey offices between December 2020 and June 2025, raising more than $74 million from more than 800 retail investors by selling shares in private, pre-IPO technology companies including SpaceX, Anduril, Anthropic, and Perplexity.

According to the complaint, more than 650 of those investors put in $100,000 or less, and over 100 were retirees. A sales force of more than 100 agents made unsolicited cold calls using scripted pitches that repeatedly promised no hidden fees. However, the SEC claims investors were charged significant markups without their knowledge. On average, investors paid 46% more than what Spaventa's own companies had paid to acquire the same shares; in some cases, markups reached as high as 91%. For instance, Anthropic shares acquired at $32.62 to $41.53 per share were resold to Fund 8 investors at $58.50 (a 41% to 79% markup that generated $5.8 million in 2024); SpaceX shares Spaventa purchased for $595 were sold for $975; and Perplexity shares bought between $340.72 and $389 were sold at $495 (a 27% to 45% markup). All told, the SEC alleges Spaventa and his companies collected $23 million in undisclosed fees—more than $12 million going to agent commissions and at least $4 million to Spaventa himself, which he allegedly spent on home purchase, renovations, personal travel, and luxury car payments.

The scheme's structure relied on self-dealing: TSG Invest Ventures, owned by Spaventa, would purchase shares first, then resell them at marked-up prices to Spaventa-controlled funds, which passed the inflated costs to investors. The SEC states that Spaventa was the sole owner of the company selling the shares and also managed and advised the funds buying them, a conflict of interest that required written client consent—which the SEC alleges he never obtained. The funds had no board of directors and no third-party evaluation of whether the transactions were fair. The SEC also claims Spaventa backdated some fund equity transfer agreements after SEC staff began an inquiry in 2023. Further complicating the structure, over 90% of the funds' holdings were actually stakes in other private pre-IPO funds, introducing a second layer of undisclosed fees and added risk.

The sales team employed deceptive tactics. Many of the more than 100 agents were unregistered, and several had been previously suspended or barred by Finra. They earned commissions of about 10% but were instructed in a handbook (allegedly approved by Spaventa) to never use the word "commission" and instead say "referral fee." When prospects asked what the fund had paid for shares, agents were coached to respond, "I'm not sure, but that's not information I'm privy to." The handbook also directed them to tell investors, "Unlike other firms, we have no hidden fees. So the price we tell you is the price of the investment." For Anduril sales specifically, agents were told to say, "When you make money, we make money. If you don't make money, we don't make money"—misleading language because the markup was allegedly collected from the investor's money as soon as the investment closed. Agents also cited returns of 200% to 1,000% and claimed past success in Airbnb, Palantir, and SoFi, despite the funds having never held any of those investments. TSG's marketing materials falsely stated the firm bought existing shares directly from shareholders and insiders and that there would be no dilution to the companies.

When reached by phone, Spaventa, 40, denied the allegations and said he planned to defend himself. He has not yet filed a response in court. The SEC is seeking disgorgement, civil penalties, and a permanent bar from the securities industry for Spaventa and his three entities. According to the complaint, the majority of investors have not recouped their investments in the funds.