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

The Spaventa Group's structure appears designed to obscure the true cost of investments to buyers. According to the SEC complaint, TSG and another Spaventa-owned company called TSG Invest Ventures bought shares first, then resold them to Spaventa's funds at inflated prices; the funds then passed those costs directly to retail investors. This layering was compounded by the fact that over 90% of the funds' holdings were stakes in other private pre-IPO funds, introducing a second layer of undisclosed fees and additional risk. The SEC alleges Spaventa never obtained written client consent for these self-dealing transactions and that the funds had no board of directors or third-party oversight to evaluate whether deals were fair to investors.

The sales operation itself relied on deceptive scripts and coach-driven messaging. Sales agents—many of whom were unregistered, suspended, or previously barred by the Financial Industry Regulatory Authority (Finra)—earned approximately 10% commissions but were coached to call them "referral fees" and tell prospects "Unlike other firms, we have no hidden fees." When asked what the fund had paid for shares, agents were instructed to say they didn't have that information. The SEC also alleges agents cited fictional track records, falsely claiming the funds had previously held stakes in Airbnb, Palantir, and SoFi. The complaint further states that Spaventa backdated some fund equity transfer agreements after SEC staff began an inquiry in 2023, suggesting an attempt to conceal the scheme.