In a boiler room operation, phones rang on a script all day, and a calling floor of more than 100 sales agents worked them one after another, according to a securities-fraud complaint the Securities and Exchange Commission filed in August. Many of the people who answered were retirees, the agency alleges, being told about a rare chance to buy shares of private companies before they ever listed on a public exchange. Behind the pitch, the SEC says, sat markups the callers never mentioned. The complaint puts a specific price on that silence: more than $74 million raised from over 800 investors who were told one fee structure and charged something far larger.
A Calling Floor of More Than 100, Dialing Mostly Retirees
The Spaventa Group LLC, TSG Capital Advisors LLC and TSG Alpha Partners LLC, the three entities named alongside New York resident Andrew Spaventa in the complaint, ran the operation from roughly December 2020 to June 2025. Sales agents cold-called thousands of prospective investors and used high-pressure sales tactics to steer money into eleven private funds marketed as access to “pre-IPO” shares, the complaint states. Many of the people who picked up the phone were retirees, a detail the agency’s New York office highlighted when it announced the charges.
According to the SEC’s Aug. 14 press release announcing the case, Spaventa and the entities he controlled raised more than $74 million from more than 800 mostly retail investors nationwide across the eleven funds. Sheldon L. Pollock, associate director of the SEC’s New York Regional Office, said unsolicited calls and high-pressure sales tactics are the calling cards of boiler room operators, adding that the agency encourages investors to stay alert to the pattern.
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How the Markup Reached Fund Investors
The complaint, filed in the U.S. District Court for the Southern District of New York, lays out the mechanics behind the fees. Spaventa, through entities he owned, purchased the pre-IPO shares himself, either directly or through another investment fund, then resold them to his own funds in principal transactions at marked-up prices, according to the SEC’s complaint. Those markups were then passed on to fund investors as fees charged on the membership interests they bought, the agency alleges, rather than disclosed as a price increase on the shares themselves.
That structure (a fund manager buying an asset first, then selling it to a fund he also controls) is exactly the kind of principal transaction the Investment Advisers Act of 1940, which the complaint cites, requires an adviser to disclose to clients. Without that disclosure, an investor has no way to know whether a price reflects the market or a mark-up built in beforehand, which is a separate legal problem from the fee amount itself.
The SEC’s account also puts a number on where the money went. Defendants collected approximately $23 million in upfront fees from investors, the agency alleges, of which more than $12 million was funneled to sales agents as commissions and about $4 million went to Spaventa personally. Measured against the more than $74 million raised, that fee total works out to roughly three of every ten dollars invested, arithmetic on the SEC’s own figures rather than a number the agency states directly.
Zero Fees Promised, a 46 Percent Markup Delivered
The gap between what investors were told and what they paid sits at the center of the fraud allegations. Defendants falsely told investors they would pay either no upfront fees at all or upfront fees of at most 12.5 percent, according to the complaint. In reality, the agency alleges, the prices investors paid were on average approximately 46 percent higher than the prices Spaventa himself paid for the same pre-IPO shares.
That spread is what separates a disclosed fee from what the SEC calls a hidden one. A fund that quotes an investor a 12.5 percent cost and then embeds a 46 percent markup inside the share price has moved close to four times the promised amount out of that investor’s return, arithmetic that follows directly from the two percentages named in the SEC’s complaint.
A Federal Complaint With Charges Still to Be Proven
The SEC’s complaint is exactly that: a complaint, not a verdict. It charges Spaventa and the three entities 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. Spaventa individually faces control-person liability and aiding-and-abetting charges. None of the defendants has been found liable for anything the SEC alleges, and the outcome will be decided in the Southern District of New York, not in a press release.
The agency is asking the court for permanent injunctions, disgorgement of what it calls ill-gotten gains plus prejudgment interest, and civil penalties against all of the defendants, along with conduct-based injunctions against Spaventa individually. No trial date, settlement or judgment had been announced as of the complaint’s filing, and every dollar figure tied to the case remains an allegation pending that outcome.
What the SEC Tells Investors to Watch For
The agency’s press release points prospective investors to its own investor alert on the risks of pre-IPO offerings, a resource written for exactly the kind of call the complaint describes. Pollock’s warning, delivered the same day the charges were filed, doubles as the plainest description of the pattern regulators say cost more than 800 people money: unsolicited calls paired with high-pressure sales tactics, followed by fees that turn out to be larger than promised once the shares are already bought.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
