SEC Charges Boiler Room Operator and Three Entities with Defrauding Retail Investors…

What the source reports

The Securities and Exchange Commission today charged New York resident Andrew Spaventa and three entities he owned and controlled with fraud and other violations in connection with unregistered securities offerings of private funds that purportedly provided retail investors an opportunity to invest in shares of “pre-IPO” private companies while charging hidden fees.

According to the SEC’s complaint, between approximately December 2020 and June 2025, Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC, and TSG Alpha Partners LLC raised more than $74 million from more than 800 mostly retail investors across the United States for eleven private funds.

Through entities he owned, Spaventa 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.

These markups 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 over 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 that they would pay either no upfront fees at all or upfront fees of at most 12.

5%, when in reality, the prices investors paid were on average approximately 46% higher than the prices Spaventa paid for the investments.

As a result of their fraud, the defendants collected approximately $23 million in upfront fees from unsuspecting investors – of which more than $12 million was funneled to their sales agents for commissions and approximately $4 million went to Spaventa personally.

The SEC’s complaint, filed in the U.

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.

Investors can learn more about the risks of investing in pre-IPO offerings in this Investor Alert .

How to read this update

This BasisPilot brief preserves the source's reported facts and publication context. The original publisher is U.S. Securities and Exchange Commission, and the linked source should remain the reference for the complete release, later corrections, tables, quotations, and any information that was not visible in the extracted page. The brief is organized around what was reported, when it was reported, and which details a reader can verify directly.

Timing and context

The source publication time is recorded separately from the time BasisPilot retrieved the page. That distinction matters because company announcements, economic releases, and regulatory notices can be updated after their first publication. A date, amount, percentage, named entity, or status statement in this brief is treated as a source fact only when it can be traced to the linked document.

What readers should verify

Readers should compare the headline with the original source, check the publication date, review the issuer or agency named in the document, and distinguish reported results from forward-looking statements. Where the source describes a transaction, financing, filing, policy action, or market status, the relevant official filing or notice may contain additional conditions.

How the details fit together

A source-linked brief should be read as a sequence rather than as a collection of isolated claims. First identify the publisher and the document type. Next confirm the date, entities, amounts, percentages, and status statements in the source. Only then consider what the event could mean for a sector or a planning assumption. This order keeps an observable fact separate from a later interpretation and makes the article easier to audit when the publisher issues a correction or follow-up notice.

What is not being inferred

The brief does not infer a stock-price reaction, a change in credit quality, or a future operating result from the announcement alone. A reported dividend, result, policy action, or filing can be material without being predictive. Readers should check the company filing, agency notice, exchange release, or other primary document identified by the publisher when a decision depends on a condition that is not fully reproduced here.

Scope of the document

Official notices often combine a narrow operative change with definitions, procedural dates, affected parties, and supporting authority. Those elements should not be collapsed into a single headline. Before applying the update to an investment or market view, identify whether the document is a proposal, final rule, request for comment, administrative notice, or correction; confirm the effective date separately from the publication date; and check whether the source limits the change to a particular entity, transaction type, reporting period, jurisdiction, or instrument.

A practical reading checklist

Record the source URL, actual publisher, publication timestamp, retrieval timestamp, and any reference period before using the information. Note which statements are historical, which are current status updates, and which are forward-looking language from the issuer or agency. Compare the source with related filings only after preserving the original wording and units. This process prevents a distribution platform from being mistaken for the issuer and reduces the chance that a headline is treated as a complete financial or regulatory record.

Recheck after publication

Company and regulatory pages can add exhibits, corrections, translations, or updated status notes after the first release. BasisPilot therefore keeps the primary link visible and records the source publication date separately from its own publication date. If the source changes materially, the article can be regenerated with a new retrieval timestamp and a new content hash while preserving the original source item identifier for deduplication.

Limits and responsible use

This is an educational news brief, not personalized investment, tax, legal, or trading advice. A reported event does not guarantee a price reaction or a future outcome. BasisPilot does not fill missing facts with estimates, and it does not treat the distribution platform as the actual publisher when the source identifies another issuer. Source-linked details should be rechecked before making a decision.