AI gets its own “boiler room” scandal |
AI gets its own “boiler room” scandal
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........