The Securities and Exchange Commission has charged the Spaventa Group boiler room fraud operation with raising more than $74 million from retail investors by cold-calling thousands of people and selling them stakes in high-profile private tech companies at undisclosed markups of up to 91%.
The SEC filed its complaint in the U.S. District Court for the Southern District of New York against Andrew Spaventa, 40, and three entities he controls: The Spaventa Group (TSG), TSG Capital Advisors, and TSG Alpha Partners.
The charges cover alleged violations of 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, STL.News reported, citing the SEC’s complaint.
How the Spaventa Group boiler room fraud allegedly worked
More than 100 sales agents allegedly cold-called prospective investors with scripted pitches for shares in SpaceX, Anduril, Anthropic, and Perplexity, promising no hidden fees. Over 800 people bought in across 11 private funds operated from offices on Long Island and New Jersey between December 2020 and June 2025.
More than 650 investors put in $100,000 or less. More than 100 were retirees, according to the SEC.
The funds allegedly paid a Spaventa-owned company for shares first, then resold those positions to investors at a markup. On average, investors paid 46% more for their positions than Spaventa’s own companies paid to acquire them, the SEC alleged. In some cases the premium reached 91%.
The SEC said investors were not told about the markups. Agents were allegedly coached to say: ‘Unlike other firms, we have no hidden fees. So the price we tell you is the price of the investment.’
Funds, fees, and alleged deception
Specific examples in the complaint illustrate the alleged scheme. Fund 8 held Anthropic shares acquired at between $32.62 and $41.53 per share and sold to investors at $58.50, a markup of 41% to 79%, raising $5.8 million in 2024. Funds 10 and 11 held Perplexity AI, bought at between $340.72 and $389 and sold at $495, a markup of 27% to 45%. Fund 2 held SpaceX, with shares purchased at $595 and sold at $975. Anduril appeared across three funds at markups of between 29% and 57%.
None of those companies are accused of wrongdoing.
In total, the SEC claimed the defendants collected $23 million in undisclosed fees. More than $12 million of that paid commissions to the sales agents, the complaint stated. Spaventa himself allegedly made at least $4 million, which he spent on a home purchase, renovations, personal travel, and luxury car payments, according to the SEC.
Agents earned commissions of about 10% but were told in an approved handbook never to use that word, saying ‘referral fee’ instead. Several agents had previously been suspended or barred by Finra, the regulatory body. Many were not registered at all.
The SEC also alleged that agents cited returns of 200% to 1,000% and claimed a track record in Airbnb, Palantir, and SoFi, when the funds had never held any of those investments.
The complaint further alleged that more than 90% of the funds’ holdings were stakes in other private pre-IPO funds, not direct share positions, adding a second layer of fees and additional risk that was not disclosed to investors.
‘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.
Spaventa denied the allegations when reached by phone 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. The majority of investors have not recouped their money, according to the complaint.
