WASHINGTON, DC – August 14, 2026 (STL.News) The Securities and Exchange Commission has charged New York resident Andrew Spaventa and three entities he owned and controlled with allegedly defrauding hundreds of mostly retail investors through private investment funds marketed as opportunities to invest in pre-IPO companies.
The SEC announced the enforcement action Friday, alleging that Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC raised more than $74 million from more than 800 investors across the United States between approximately December 2020 and June 2025.
The money was raised through 11 private funds that purportedly offered investors access to shares of private companies before an initial public offering.
But according to the SEC’s complaint, investors were allegedly charged substantial undisclosed markups that resulted in approximately $23 million in upfront fees.
The complaint was filed in the U.S. District Court for the Southern District of New York.
The allegations have not been proven at trial, and the filing of an SEC civil enforcement action does not constitute a finding that Spaventa or the companies violated federal securities laws.
SEC Alleges Pre-IPO Investments Were Marked Up
At the center of the SEC’s case is how shares of private companies were allegedly acquired and later sold to the investment funds.
According to the commission, Spaventa used entities he owned to purchase pre-IPO shares either directly or through other investment funds.
Those investments were then allegedly sold in principal transactions to the private funds at higher prices.
The SEC contends those markups were ultimately passed along to investors as hidden fees when they purchased membership interests in the funds.
Regulators say the difference was substantial.
The SEC alleges investors were told that they would pay either no upfront fees or upfront fees of no more than 12.5%.
Instead, the commission alleges that investors paid, on average, about 46% more than the prices Spaventa paid for the investments.
The alleged pricing difference generated approximately $23 million in upfront fees, according to the SEC.
More Than 100 Sales Agents Allegedly Used
The SEC also detailed how the investments were marketed.
Regulators allege Spaventa and the entities used more than 100 sales agents who cold-called thousands of prospective investors nationwide.
Many of those contacted were retirees, according to the complaint.
The SEC characterized the operation as using high-pressure sales tactics to encourage prospective investors to participate in the private funds.
Of the approximately $23 million in upfront fees allegedly generated through the operation, more than $12 million was paid to sales agents as commissions, according to the SEC.
The commission further alleges approximately $4 million went personally to Spaventa.
Sheldon L. Pollock, associate director of the SEC’s New York Regional Office, warned investors about unsolicited investment solicitations in announcing the case.
“Unsolicited calls and high-pressure sales tactics are the calling cards of so-called boiler room operators,” Pollock said.
The SEC encouraged investors to exercise caution when confronted with those sales methods.
Who Is Andrew Spaventa?
Spaventa, also publicly identified as Drew Spaventa, has described himself as the founder and chief executive officer of TSG Invest.
Publicly available materials associated with TSG Invest have described the organization as operating through affiliated financial-services businesses.
TSG’s website states that The Spaventa Group LLC operates under the TSG Invest name but is not itself a registered broker-dealer or investment adviser.
The website identifies TSG Capital Advisors LLC as a FINRA-member broker-dealer providing broker-dealer services and private placements and TSG Alpha Partners LLC as an SEC-registered investment adviser.
Those registrations should not be interpreted as SEC approval or endorsement of the firms, their executives or particular investments.
Spaventa’s FINRA BrokerCheck record identifies him under CRD No. 6175466.
SEC Scrutiny Predated Friday’s Lawsuit
Public indications of regulatory scrutiny preceded the SEC’s Friday enforcement action.
Reports citing Spaventa’s regulatory disclosures earlier in 2026 noted an SEC investigation and a Wells notice.
A Wells notice generally informs an individual or company that SEC staff has made a preliminary determination to recommend an enforcement action. Receiving one does not establish that securities laws have been violated.
Those disclosures indicated that regulators were examining the matter months before the Aug. 14 complaint was filed.
Friday’s announcement represents a major escalation because the SEC has now formally brought civil charges in federal court.
SEC Alleges Multiple Federal Securities Law Violations
The SEC’s complaint charges Spaventa and the three entities with violations involving federal antifraud, securities-registration, and broker-dealer-registration provisions.
The allegations involve provisions of three major federal securities statutes:
- Securities Act of 1933;
- Securities Exchange Act of 1934; and
- Investment Advisers Act of 1940.
The Commission also charged Spaventa with control-person liability and aiding-and-abetting violations.
The SEC is asking the federal court to impose permanent injunctions against the defendants.
Regulators are also seeking disgorgement of allegedly ill-gotten gains, prejudgment interest and civil monetary penalties.
The commission additionally seeks conduct-based injunctions against Spaventa.
The amounts of any potential disgorgement or civil penalties ultimately imposed would be determined through the litigation or a settlement and should not be assumed from the $74 million investors allegedly placed in the funds.
Why Pre-IPO Investments Carry Additional Risks
Pre-IPO investments have become increasingly visible as some private companies remain outside public markets for longer periods.
Unlike securities traded on major public exchanges, shares of privately held companies can have limited liquidity and limited publicly available information.
Investors may also encounter complicated investment structures in which they do not purchase shares of the underlying private company directly.
Instead, an investor might acquire an interest in a fund or special-purpose vehicle that itself owns, or has an economic interest in, private-company securities.
That structure makes understanding fees, markups and conflicts of interest particularly important.
The SEC has repeatedly urged investors considering pre-IPO opportunities to investigate who is selling the investment, determine whether securities professionals are properly registered when registration is required, and carefully review fees and other costs.
Promises of access to prominent private companies should not substitute for due diligence.
What Happens Next?
The SEC’s action is a civil enforcement case.
The defendants will have an opportunity to respond to the allegations in federal court and contest the commission’s claims.
The litigation could ultimately result in a court decision, dismissal, settlement, or other resolution.
Friday’s complaint therefore represents the SEC’s allegations rather than a final determination of liability.
For investors, the case also illustrates why the difference between an investment’s underlying acquisition price and the amount ultimately charged to investors can be material.
Here, that difference is central to the government’s allegations.
The SEC maintains that investors were led to believe upfront costs would be zero or capped at 12.5%, while the prices they actually paid averaged about 46% above what Spaventa paid for the investments.
Whether the SEC can establish those and its other allegations will now be determined through the federal court process.
Source: U.S. Securities and Exchange Commission, Press Release No. 2026-75, Aug. 14, 2026.
Editor’s Note: The claims described in this report are allegations contained in a civil complaint filed by the Securities and Exchange Commission. Andrew Spaventa, The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC are entitled to contest the allegations. No final judicial determination of liability is reflected in the SEC’s Aug. 14 announcement.
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