SEC Charges Andrew Spaventa, TSG Entities With Defrauding Pre-IPO Fund Investors
The U.S. Securities and Exchange Commission has charged New York resident Andrew Spaventa and three entities he owned and controlled with defrauding more than 800 mostly retail investors who put more than $74 million into 11 unregistered private funds that bought shares of pre-initial public offering, or pre-IPO, companies, alleging the defendants collected about $23 million in undisclosed fees.
According to the SEC’s complaint, from December 2020 through at least June 2025, Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC sold membership interests in 11 private funds to investors across the United States.
Through entities he owned, Spaventa allegedly 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. Those markups, the SEC alleges, were then passed on to investors in the form of hidden fees charged on the sale of membership interests in the funds.
“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. “We encourage investors to be vigilant when it comes to these types of tactics.”
As alleged, Spaventa and the entities he controlled solicited these investments using more than 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 they would pay no upfront fees or upfront fees of at most 12.5%, the SEC alleges, when in reality, the prices investors paid were on average about 46% higher than the prices Spaventa paid for the investments. The SEC alleges the defendants collected about $23 million in upfront fees from investors — of which more than $12 million was funneled to their sales agents for commissions and about $4 million went to Spaventa personally, including for a home purchase, home renovations, personal travel, and luxury car payments.
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.
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