The Securities and Exchange Commission (SEC) has charged three individuals who allegedly concocted a “Pre-IPO Scheme” that raised approximately $120 million. The individuals targeted were Accredited Investors and securities were issued under Reg D. The SEC has charged John LoPinto, Robert Wilkos, and Laren Pisciotti for their role in the alleged fraud.
The SEC complaint alleges that from at least October 2019 until December 2022, the defendants raised approximately $120 million from more than 900 investors.
The SEC alleges that the defendants misled investors about the supposed investments, including that there were no upfront fees in the investments while, in fact, paying themselves at least $16 million in commissions. Investors were allegedly told that the funds were registered with the SEC when they were not and that they owned shares in pre-IPO companies, which was untrue.
The SEC complaint also alleges that many investors never received the promised pre-IPO shares.
The SEC’s investigation is ongoing.
The SEC also noted that the pre-IPO space remains a priority area for the Division of Enforcement. The SEC included in the release a list of pre-IPO enforcement actions in the past few years:
- In August 2024, the Commission charged a China-based investment adviser, its US-based holding company, and the CEO of both entities in a $6 million pre-IPO fraud.
- In December 2023, the Commission charged five individuals and four companies with a $528 million pre-IPO fraud.
- In August 2023, the Commission obtained emergency relief in a $4.2 million pre-IPO fraud.
- In June 2023, the Commission obtained emergency relief against an unregistered broker-dealer for a pre-IPO fraud. In June 2024, the Commission charged three individuals who worked on behalf of that broker-dealer in a $184 million pre-IPO fraud.
- In May 2022, the Commission obtained emergency relief to stop a $410 million pre-IPO fraud. In March 2023, the Commission charged three sales agents for selling interests in that pre-IPO fraud.
- In December 2020, the Commission charged a boiler room operator with defrauding retail investors in the sale of pre-IPO shares.
