More than 800 investors, including over 100 retirees, were allegedly pitched rare access to private companies such as SpaceX, Anthropic, Anduril, and Perplexity, along with repeated promises of no hidden fees.
Federal regulators describe something very different.
The Securities and Exchange Commission says a New York-area "boiler room" operation embedded huge markups in those investments, leaving everyday investors to bear the risk while insiders took in millions.
Here's what to know
In a case outlined by Fortune, the SEC alleges that Andrew Spaventa, founder of The Spaventa Group, and three entities he controls ran a scheme from December 2020 through June 2025 that raised more than $74 million across 11 private funds.
Regulators say investors were charged far more for the same shares than Spaventa-affiliated firms had paid — 46% more on average, with some markups climbing as high as 91%.
The SEC says most of the investors were retail participants, with more than 650 putting in $100,000 or less and more than 100 identified as retirees.
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The agency alleges the operation brought in $23 million in undisclosed fees overall, including more than $12 million used to fund commissions for the sales team.
Reached by phone, Spaventa denied the allegations and said he intends to fight them. The SEC is seeking disgorgement, civil penalties, and a permanent ban from the securities industry.
Regulators say the problem was not the high-profile private tech companies tied to the funds, but what investors were allegedly not told.
The SEC claims buyers were not informed about the size of the markups, the structure of the transactions, or that many positions were really stakes in other private funds, adding another layer of fees and risk.
More background
The SEC says the sales effort leaned on cold calls, prepared scripts, and pressure tactics to present risky, opaque investments as simple and exclusive.
Regulators allege agents were told to use the term "referral fee" instead of "commission."
If a prospective investor asked what the fund had paid for the shares, agents were allegedly instructed to answer, "I'm not sure, but that's not information I'm privy to."
The SEC says the pitches also included assurances such as, "Unlike other firms, we have no hidden fees," and, "So the price we tell you is the price of the investment."
But regulators allege that the markup was taken from investor money as soon as a fund investment closed.
What's being done?
The SEC says Spaventa stood on both sides of many transactions. Entities he owned allegedly bought positions first, then sold them at higher prices to funds he also managed.
The agency argues that the setup required written client consent, which it says was never obtained.
The complaint further alleges that some sales agents lacked proper registration and that several had previously been suspended or barred by FINRA.
Regulators also claim some fund equity transfer agreements were backdated after staff opened an inquiry in 2023.
As Sheldon L. Pollock, associate director of the SEC's New York regional office, put it: "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."
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