Giovanni Pennetta, a Manhattan-based investment adviser, collected more than $10.5 million from investors by promising them pre-IPO shares of Anduril, the fast-growing defense technology startup. The shares never existed. Federal prosecutors and the Securities and Exchange Commission said Pennetta fabricated documents to make the deals look real, then funneled millions into personal spending. He pleaded guilty earlier this year and was sentenced to four years in federal prison.
How Anduril’s defense mystique shielded a years-long fraud
Pennetta ran his operation through an advisory firm called Sestante Capital LLC and a fund called NextGenTech Investments LLC, according to the SEC’s enforcement filing. From February 2021 through December 2025, he told investors he could secure allocations of Anduril stock before the company went public. Anduril, which builds autonomous defense systems under contracts with the U.S. military, operates in a space where details about partnerships and deal terms are often shielded by classification rules. That opacity gave Pennetta cover. Investors had fewer ways to independently verify whether a private fund actually held shares of a defense contractor than they would with a consumer-facing tech company preparing for a public listing.
The scheme ran for nearly five years, far longer than many affinity-style investment frauds. One reason is structural: pre-IPO shares of private companies do not trade on regulated exchanges, so there is no public ticker, no quarterly earnings call, and no brokerage statement generated by a third-party custodian. When the company in question also works on classified programs, the information gap widens further. Pennetta exploited that gap by providing falsified paperwork claiming access to Anduril shares, according to the Justice Department. Those documents created the appearance of legitimate allocations tied to NextGenTech series offerings, complete with references to purported side letters and share purchase agreements.
According to the SEC, Pennetta told clients that NextGenTech would acquire Anduril shares from existing shareholders and then hold them in special purpose vehicles until an eventual public listing or secondary liquidity event. In reality, no such purchases were made. Instead, investigators say Pennetta used new investor money to pay earlier investors modest redemptions and to cover personal expenses, including luxury travel and credit card bills. The illusion of a sophisticated, defense-focused venture fund helped him attract high-net-worth individuals who were eager to participate in a perceived national security success story.
Anduril itself was not accused of wrongdoing. The company never sold stock to Sestante, NextGenTech, or Pennetta personally, according to the charging documents. But the mystique surrounding a secretive defense contractor, combined with the buzz around pre-IPO access, proved to be a potent marketing tool. Investors who might have asked tougher questions about a more ordinary startup were sometimes reluctant to press for documentation that, they were told, could be restricted by non-disclosure agreements or national security sensitivities.
Criminal charges, guilty plea, and $12.5 million in forfeiture
The federal indictment charged Pennetta with securities fraud, wire fraud, and aggravated identity theft, according to the charging document filed in federal court for the Southern District of New York. The identity theft count indicates prosecutors believe he used the names or credentials of other individuals without authorization to bolster his fabricated investment materials and correspondence.
Pennetta pleaded guilty on March 5, 2026, according to the Justice Department. Judge Jed S. Rakoff then sentenced him to four years in prison and ordered restitution of $11,928,266.25 along with forfeiture of $12,546,279.86, according to the DOJ’s sentencing announcement. The SEC’s civil action, filed in parallel, stated that Pennetta misappropriated over $6.2 million of the $10.5 million investors contributed, using the remainder to make partial repayments and to keep the scheme going.
Beyond prison time and financial penalties, Pennetta faces a likely bar from the securities industry. The SEC’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties, sanctions that would effectively end his ability to work as an investment adviser or to raise capital from the public. For investors, the restitution order offers some prospect of recovery, but the gap between the money raised and the assets remaining underscores how little was left by the time authorities intervened.
Lessons for investors chasing pre-IPO deals
The Pennetta case highlights the risks that come with opaque private-market deals, especially those tied to buzzy, hard-to-access companies. Unlike public offerings, private placements are not vetted through systems like the SEC’s EDGAR filing platform, leaving investors more dependent on representations from fund managers and intermediaries. When those intermediaries fabricate documents or misstate their relationships, it can take years for the deception to surface.
For individual investors, several safeguards emerge from the Anduril pre-IPO saga. Independent verification is crucial: asking for third-party custodial statements, confirming that a fund is properly registered when required, and consulting with outside counsel before wiring large sums can all slow down a fraudster’s timeline. Skepticism is also warranted when an adviser claims exclusive access to a marquee name but cannot provide clear, auditable proof of ownership.
The case also illustrates how narratives around national security and cutting-edge technology can dull critical judgment. Pennetta wrapped his pitch in the language of innovation and defense, offering clients a chance to profit from tools he said would help protect the country. In the end, prosecutors say, the only thing being defended was a years-long lie-one that unraveled only after millions had already vanished.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
