AI gets its own "boiler room" scandal | Fortune
This was a headline I’d been waiting to see.
“Boiler room raised $74 million selling retirees SpaceX, Anduril, Anthropic, and Perplexity while reaping ‘massive hidden fees,’ SEC claims,” my colleague Amanda Gerut wrote last week, outlining a case that the SEC has brought against a Long Island-based financial firm it’s calling a pre-IPO “boiler room.”
At the center of the SEC’s allegations, The Spaventa Group, run by former broker Andrew Spaventa. The complaint, filed Friday, is a doozy: The SEC is alleging that Spaventa and his firm had a force of more than 100 agents, making thousands of phone calls, to sell shares in pre-IPO darlings—with no hidden fees. The companies the agents were (again, allegedly) selling were the sexiest private company names out there, including Anduril, Anthropic, Perplexity, and SpaceX (before its IPO).
That there was an alleged boiler room scam running in the tri-state area, amid a legendary, AI-fueled run-up in the private markets isn’t surprising. (I’ve written extensively about the absolute exuberance—and likely fraud—that’s bound to emerge from this time, as investors chase phantom Anthropic shares, and the secondary market is both massive and unregulated). What is surprising is here the scale that the SEC says the scam hit, as Fortune’s Gerut wrote:
“More than 800 people bought in. Most were retail investors, and more than 650 put in $100,000 or less, while over 100 were retirees, according to the Securities & Exchange Commission. The alleged boiler room raked in more than $74 million for 11 private funds run from offices on Long Island and New Jersey over the course of four and a half years from December 2020 to June 2025.
Despite the promise of no rip offs from “unnecessary fees,” investors paid on average 46% more for their positions than Spaventa’s own companies paid to get them, the SEC alleged in a complaint filed on Friday in the Southern District of New York. In some cases, the premium ran as high as 91%. Investors allegedly had no idea the markups were so high.”
Freeze frame; 800 people buying in, with more than 100 retirees, to the tune of an eventual $74 million—that’s a real scale-up from the last high-profile pre-IPO fraud chase the SEC brought this year, when the regulator brought a case against Giovanni Pennetta, alleging he’d misappropriated $10 million investor dollars while selling fraudulent shares of companies like Anduril. (Pennetta ultimately pled guilty to one count of wire fraud.)
Importantly, Spaventa denied the SEC’s claims when my colleague reached him by phone.
But I’ll be following this case as it goes on—and others like it. Because regardless of how the Spaventa case plays out, we haven’t heard the last of the SEC on the chaotic swirl of demand that’s led to the increasingly public private markets.
Correction, August 18, 2026: The email version of this misstated the investment threshold on one reference.
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Allie Garfinkle is a senior writer and editor at Fortune, where she runs Term Sheet; leads coverage of private capital, investors, and startups; and co-chairs the Brainstorm conference series.