The Pre IPO Marketplace Inc; Keyport Venture Partners, LLC; Keyport Venture Management, LLC; Keyport Venture Advisors, LLC; Principal Pre-IPO Consulting Group LLC; GlobalX VC LLC; John Michael LoPinto; Robert Wilkos; and Laren Pisciotti

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26149 / October 2, 2024

Securities and Exchange Commission v. The Pre IPO Marketplace Inc; Keyport Venture Partners, LLC; Keyport Venture Management, LLC; Keyport Venture Advisors, LLC; Principal Pre-IPO Consulting Group LLC; GlobalX VC LLC; John Michael LoPinto; Robert Wilkos; and Laren Pisciotti, No. 1:24-civ-06886 (E.D.N.Y. filed Sept. 30, 2024)

SEC Charges Three Individuals in the New York Metropolitan Area for Perpetrating a $120 Million Pre-IPO Fraud Scheme

The Securities and Exchange Commission today 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. ("Marketplace"); Keyport Venture Partners LLC ("Keyport Partners"); Keyport Venture Management LLC ("Keyport Management"); and Keyport Venture Advisors LLC ("Keyport Advisors"), which were jointly owned and/or controlled by LoPinto and Wilkos; and Principal Pre-IPO Consulting Group LLC ("Principal") and GlobalX VC LLC ("GlobalX"), 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 U.S. 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.

The SEC's complaint charges the defendants with violating Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. It also charges Marketplace, Keyport Partners, Keyport Management, Keyport Advisors, GlobalX, LoPinto, Wilkos, and Pisciotti with violating Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder; and Marketplace, Principal, LoPinto, Wilkos, and Pisciotti with violating Sections 5(a) and (c) of the Securities Act and Section 15(a) of the Exchange Act. 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 SEC's ongoing investigation is being conducted by Randall D. Friedland, Elizabeth Doisy, Eleanor J.G. Wasserman, and Jeffrey Anderson and is supervised by Pei Y. Chung, Peter Rosario, and Stacy L. Bogert. The litigation will be led by John Timmer and Daniel Ball and supervised by James Connor.