The U.S. Securities and Exchange Commission charged John LoPinto, Robert Wilkos, and Laren Pisciotti for their roles in a fraudulent scheme involving investments in pre-IPO private companies. The SEC also charged several companies owned and/or controlled by the defendants: the Pre IPO Marketplace Inc.; 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.
The SEC complaint alleges that from at least October 2019 until December 2022, the defendants raised approximately $120 million from more than 900 investors in the United States and abroad by selling interests in private funds that supposedly held shares in pre-IPO companies, that is, privately held companies that had not yet conducted an initial public offering.
The SEC alleges that the defendants, directly and through sales agents, told investors numerous lies 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; that the funds were registered with the SEC when they were not; and that the funds owned shares in pre-IPO companies when they did not. In addition, according to the complaint, LoPinto used an alias to conduct business to hide his disciplinary history, which includes prior sanctions by the SEC and the Financial Industry Regulatory Authority, or FINRA. The complaint also alleges that many investors never received the pre-IPO shares that they were promised and for which they invested with the defendants.
“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 enforcement division. “Today we start the process of holding them accountable for their fraudulent conduct.”
The SEC’s complaint charges the defendants with violating the antifraud and other provisions of the federal securities laws. The complaint, filed in the U.S. District Court for the Eastern District of New York, seeks permanent injunctive relief, return of allegedly ill-gotten gains together with prejudgment interest, and civil penalties from all defendants. The complaint also seeks industry and officer-and-director bars against LoPinto, Wilkos, and Pisciotti. Wilkos has agreed to settle the case and consent to injunctive relief, with the court determining additional remedies at a later date.
The pre-IPO space remains a priority area for the enforcement division. Previous DI Wire reporting on the subject included:
- In August 2024, SEC charged a China-based investment adviser, its U.S.-based holding company, and chief executive officer of both entities in a $6 million pre-IPO fraud.
- In June 2023, SEC 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; charges were settled in September.
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