SEC Charges New York Fund Manager Over $74m Private-Offering Scheme

August 15, 2026
By Mintesinot Nigussie

The US Securities and Exchange Commission has charged New York resident Andrew Spaventa and three companies he controlled with fraud, alleging they concealed millions of dollars in fees from more than 800 mostly retail investors who were offered access to pre-IPO shares of private companies.

The SEC said Spaventa and the companies raised more than 74 million US dollars between December 2020 and June 2025 through 11 private funds. The investors were located across the US and were solicited through a network of more than 100 sales agents.

According to the regulator's complaint, Spaventa acquired pre-IPO shares through entities he controlled and then sold them to the private funds at marked-up prices. The resulting mark-ups were passed to investors as undisclosed fees attached to their purchases of fund membership interests.

The SEC alleges that investors were told they would pay either no upfront fees or fees of no more than 12.5 percent. In practice, the prices paid by investors were on average about 46 percent higher than the prices Spaventa's entities had paid for the underlying investments.

The alleged scheme generated about 23 million US dollars in upfront fees, according to the SEC. More than 12 million US dollars was paid to sales agents as commissions, while about 4 million US dollars went to Spaventa personally.

The regulator said the defendants used cold calls and high-pressure sales tactics to market the funds to thousands of prospective investors, including many retirees.

"Unsolicited calls and high-pressure sales tactics are the calling cards of so-called boiler room operators," Sheldon L. Pollock, associate director of the SEC's New York Regional Office, said. He urged investors to remain vigilant about such tactics and hidden fees.

The SEC filed its complaint in the US District Court for the Southern District of New York. It accused Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC of violating antifraud, securities-registration and broker-dealer registration provisions under US securities laws.

The complaint also alleges control-person liability and aiding and abetting violations by Spaventa.

The SEC is seeking permanent injunctions, the return of allegedly ill-gotten gains plus prejudgment interest, and civil penalties. It is also seeking conduct-based injunctions against Spaventa.

Source: FSX Business News