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.
Pre-IPO investment fraud is a key priority for the SEC, which earlier in the year described an alleged pre-IPO share sales fraud as being 'like a Hollywood movie'.
Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.
Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.
Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.
Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.
Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
