The US SEC sued The Spaventa Group and its founder, Andrew Spaventa, for over $74 million from more than 800 investors to sell unlisted technology companies through private funds only between the end of 2020 and mid-2025. Underlying assets named include SpaceX, Anduril, Anthropic and Permexity.

According to SEC, these products were sold mainly to retail investors, with more than 650 persons investing no more than $100,000 alone and more than 100 retirees. According to the regulator, the sales team attracts customers by telephone and by high-pressure rhetoric, without disclosing the actual fee structure.

The SEC accused of concealing a high price increase.

According to a petition filed with the Federal Court of the Southern District of New York on Friday, when investors bought the relevant share, the average price paid was 46 per cent higher than the cost of the delivery of the Spaventa controlled entity, and the price added for individual transactions was up to 91 per cent. SEC states that the investors were not aware of these price increases.

The regulator estimated that the defence had collected a total of approximately $23 million in undisclosed charges, of which over $12 million was for commission for telephone sales personnel, and Spaventa himself received at least $4 million. The complaint states that part of the funds was used for house purchases, renovations, personal travel and limo expenses.

During a telephone interview with the media, Spaventa denied the charges and stated that he would respond. This time, the SEC also indicted three entities under his control, including The Spaventa Group, TSG Capital Advisors and TSG Alpha Partners, on suspicion of securities fraud and violations of broker registration requirements.

The money is transferred and sold to the fund.

SEC states that the transaction was not a direct purchase by the Fund of shares in the targeted company, but was first bought by an entity controlled by Spaventa and then resold at a higher price to the fund under its administration, which ultimately transferred the cost to the investor.

  • Anthropic shares are 41% to 79% higher than the purchase price.
  • Perplexity AI Added shares of about 27% to 45%
  • SpaceX related share resold from $595 to $975

SEC also states that Anduril appeared in the Fund 3 alone, with an increase of approximately 29 to 57 per cent. The unlisted companies mentioned in the petition also included Stripe, Rubrik, Epic Gomes and Impossible Foods. The company itself was not charged with misconduct.

The marketing and fund structure is in question.

SEC states that the funds had no board of directors and no independent third party assessed whether the transfer price was fair. The regulator also alleged that Spaventa had re-signed or re-signed part of the Fund's equity transfer agreements following an investigation initiated by the SEC in 2023.

The complaint also states that many of the sales workers had not completed their registration and that some had previously been suspended or banned by the United States Financial Services Regulatory Authority, FinRA. While they received about 10 per cent of the commission, the internal manual required them not to use the word “commission” but to change the term to “induction fee”.

The SEC states that the sales script also contains misleading statements, such as the statement that “no hidden costs” “the price you hear is the price of the investment”, and that “if you make money, we make money”. However, the regulator stated that the relevant mark-up was included when the investor ' s subscription fund was completed.

In addition, TSG ' s marketing materials stated that it purchased shares directly from its original shareholders or insiders and that this did not result in a dilution of the company ' s equity. The SEC, for its part, noted that the holding of more than 90 per cent of the associated funds was in fact the share of other private pre-IPO funds, which meant that investors not only covered the first tier but also added a second tier of costs and additional risks.

Additional information:Currently, Spaventa has not formally filed a reply with the Court. The SEC seeks to recover the proceeds of the offence, imposes civil fines and permanently prohibits them from entering the securities industry. The petition states that most investors have still not recovered their investment.