Firms, individuals charged with alleged $120M pre-IPO investment fraud

Firms, individuals charged with alleged $120M pre-IPO investment fraud
SEC says investors were misled while defendants took millions of dollars in fees.
OCT 01, 2024

More than 900 investors were duped into believing they were investing in regulated funds holding shares in pre-IPO companies, according to the Securities and Exchanges Commission.

The allegations against three individuals and several entities are that investors were told that their combined investments of more than $120 million were without upfront fees – when $16 million in commissions were charged; that the funds were SEC-regulated when they were not; and that the funds owned shares that they did not.

The alleged activities took place from at least the period October 2019 until December 2022 and the SEC says that many of the investors did not receive the shares they were promised.  

The SEC charged John LoPinto, Robert Wilkos, and Laren Pisciotti along with Keyport Venture Partners LLC; Keyport Venture Management LLC; and Keyport Venture Advisors LLC, which were jointly owned and/or controlled by LoPinto and Wilkos; and Principal Pre-IPO Consulting Group LLC and GlobalX VC LLC, which were owned or controlled by Pisciotti.

LoPinto is also said to have hidden his disciplinary history including sanctions by the SEC and FINRA.

“As alleged, among other lies, the defendants lied about the shares they owned and about fees they said they wouldn’t charge, and in the end, they took millions of their investors' money for themselves,” said Stacy L. Bogert, Associate Director of the SEC’s Division of Enforcement. “Today we start the process of holding them accountable for their fraudulent conduct.”

The SEC complaint was filed in the United States District Court for the Eastern District of New York. None of the allegations has been proven in court.

The SEC is seeking permanent injunctive relief, return of allegedly ill-gotten gains together with prejudgment interest, and civil penalties from all defendants. It is also seeking officer and director bars for the three individuals. Wilkos has agreed to settle the case and consent to injunctive relief.   

Latest News

The fight over the CFPB is just beginning
The fight over the CFPB is just beginning

Locked out of their offices and told to stay home, employees at the Consumer Financial Protection Bureau have asked the courts to intervene as Elon Musk and Republican leaders move to shut down the agency that was established to protect people from predatory lending and financial scams.

Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership
Business-focused wealth tech RISR lands $8B Wealthcare Capital Management partnership

Fintech platform interVal has also introduced a new feature to help advisors support entrepreneurial business owner clients better.

LPL boosts revenue potential with amped-up alts platform
LPL boosts revenue potential with amped-up alts platform

Along with greater revenue, alternative investments also carry risks, one industry lawyer noted.

How SageSpring Wealth Partners' next-gen strategy has fueled its success
How SageSpring Wealth Partners' next-gen strategy has fueled its success

President Jeff Dobyns unpacks the strategic power of mentorship, what makes an "ideal team player," and how the firm's 89 percent success rate has paid off for veteran advisors.

Powell heads for hot-seat hearings with ongoing pressure from Trump policies
Powell heads for hot-seat hearings with ongoing pressure from Trump policies

The Fed chair is in for some "hyper-charged" meetings, with legislators likely to raise questions on tariff threats and apparent steps to comply with anti-DEI orders.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.