The U.S. Securities and Exchange Commission (SEC) charged John LoPinto, Robert Wilkos, and Laren Pisciotti with fraud in a scheme involving investments in pre-IPO private companies. The SEC also charged several companies owned and/or controlled by the defendants. The SEC alleges that between Oct. 2019 and Dec. 2022, the scheme raised approximately $120 million from more than 900 investors in the U.S. and abroad.
Key Points:
- The SEC charged John LoPinto, Robert Wilkos, Laren Pisciotti, and six related entities for defrauding investors out of $120 million in a pre-IPO scheme. The SEC also charged Pre IPO Marketplace Inc., Keyport Venture Partners LLC, Keyport Venture Management LLC, Keyport Venture Advisors LLC, Principal Pre-IPO Consulting Group LLC, and GlobalX VC LLC.
- Defendants misled over 900 investors by falsely claiming ownership of pre-IPO shares, hiding fees, and using aliases to mask disciplinary histories.
- The SEC has ramped up enforcement in pre-IPO fraud cases, with multiple high-profile actions taken since 2020.
Short Narrative:
The SEC continues its crackdown on pre-IPO fraud with charges against three individuals and six entities in the New York area, accusing them of defrauding over 900 investors out of $120 million. John LoPinto, Robert Wilkos, and Laren Pisciotti promised investors shares in pre-IPO private companies, collecting millions in commissions while lying about fees and the legitimacy of their holdings. The defendants used fraudulent tactics, including hiding past sanctions and offering non-existent pre-IPO shares, leaving many investors empty-handed.
This case adds to a growing list of SEC enforcement actions targeting fraudulent pre-IPO schemes. The SEC’s Division of Enforcement has made pre-IPO fraud a priority, filing multiple cases, including a $528 million fraud case in December 2023 and a $410 million scheme in May 2022.
Compliance Insight:
The pre-IPO market has become a hotbed for fraudulent activity, and the SEC has ramped up its efforts to bring perpetrators to justice. Recent cases include:
- August 2024: A China-based investment adviser and CEO charged in a $6 million pre-IPO fraud.
- December 2023: SEC charged five individuals in a $528 million pre-IPO fraud.
- June 2024: SEC brought charges against three individuals for a $184 million pre-IPO fraud connected to an unregistered broker-dealer.
- May 2022: SEC stopped a $410 million pre-IPO fraud scheme, leading to subsequent charges against sales agents in March 2023.
The SEC’s intense focus on pre-IPO fraud highlights the importance of conducting thorough due diligence before investing in such offerings. Investors should be cautious of promises related to unregistered securities and watch for hidden fees or unverifiable claims about ownership of pre-IPO shares.
Call for Information: Have you or someone you know been targeted by fraudulent pre-IPO schemes? FinTelegram encourages whistleblowers and victims to come forward. Your information can help shed light on these fraudulent practices and protect future investors.
