SEC says it stepped up scrutiny of pre-IPO share sales in fiscal 2026

The Securities and Exchange Commission says it put more effort last year into policing the trade in shares of companies that have not yet gone public. Its enforcement results for the fiscal year that ended September 30, published on November 10, 2026, say the Division of Enforcement stepped up investor protection in the pre-IPO secondary market. The SEC's reasoning is that as investors get more access to private markets, fraudsters there pose a growing risk.

Across all its work, the agency filed 348 enforcement actions: 235 standalone actions and 113 follow-on administrative proceedings, which seek to bar or suspend people from parts of the securities business after criminal convictions, injunctions or similar orders. It obtained orders for $1.095 billion in monetary relief, although $235 million of the disgorgement ordered was deemed satisfied by a court in a separate action that the SEC did not bring. Two-thirds of the standalone actions charged at least one individual.

The pre-IPO cases

In three of the cases the SEC highlights, investors reached pre-IPO shares indirectly, by buying into funds that held them, and in each the agency alleges that investors were misled about fees or about how their money was used.

In August, the SEC sued Andrew Spaventa and three companies he controlled. It alleges they raised more than $74 million from more than 800 mostly retail investors for 11 private funds between about December 2020 and June 2025, using more than 100 sales agents to cold-call prospects, many of them retirees. Investors were told upfront fees were zero or at most 12.5%, the complaint says, but paid on average about 46% more than Spaventa had paid for the shares.

Days earlier, the agency charged New York adviser Adit Ventures Management, its CEO Eric Munson and three affiliated general partners, alleging misuse of client money and millions in undisclosed fees on investments in pre-IPO shares such as SpaceX and Klarna. Without admitting the allegations, the defendants agreed to a judgment, subject to court approval, with the amounts to be set by the court.

On September 30, the SEC charged private fund adviser Meyer Global Management and its CEO, Owen Meyer, alleging misappropriation and false statements to investors in funds tied to SpaceX and other pre-IPO securities. The complaint says one fund lost its investment of nearly $3 million in SpaceX after the defendants repeatedly failed to cover a capital call. “This case is a reminder that fraudsters can exploit the allure of exclusive, high-return pre-IPO access to take advantage of retail investors,” said Corey A. Schuster, chief of the Enforcement Division's Asset Management Unit, when the case was filed.

The results also cite a settled order involving a California resident and a private fund that invested in pre-IPO shares of Palantir Technologies. The Spaventa and Meyer complaints were filed in the U.S. District Court for the Southern District of New York, and their claims remain allegations.

Venture funds and new tools

In a separate settled action, the SEC found that three Florida advisory firms and their owner, Riadh Fakhoury, told investors in venture capital funds they managed that their investments were “low risk, high return,” partly by citing investments that established institutional investors had supposedly made alongside the funds in the same private tech companies, which never happened.

The report also describes changes inside the division. It set up a Retail Fraud Working Group, which the SEC says has already led to more than a dozen new investigations, and an Office of Super Intelligence and Analytics that uses what the agency calls Super Intelligence, or SI, tools to flag anomalies, speed up document review and trace blockchain and financial flows. The division updated its Enforcement Manual for the first time since 2017, and the Commission rescinded a rule under which it would not settle a case involving sanctions unless the defendant agreed not to deny the allegations publicly.

SEC Chairman Paul S. Atkins said enforcement actions and financial remedies “are important measures of activity, but they are not the only or most telling measures.” The release gives no year-on-year comparison for its totals. For whistleblowers, it says the 65 individuals who received awards were the most since fiscal 2023.