The Securities and Exchange Commission charged a previously barred securities broker with fraudulently raising funds from investors purportedly to purchase shares of prominent private companies prior to their initial public offerings (IPOs). The SEC also charged three individuals and an entity as relief defendants.

According to the SEC's complaint, in the summer of 2019, Peter R. Quartararo of Hicksville, New York, a former broker who had previously been barred by FINRA, began soliciting investors to invest through him in shares of several "unicorn" companies, including Peloton Interactive, Inc. and Airbnb, Inc., which were expected to increase in value when those companies completed their IPOs. The complaint alleges that, over the next several months, Quartararo convinced at least four investors to invest a total of $436,000 in the purported pre-IPO shares. According to the complaint, Quartararo never purchased or held any pre-IPO shares in these companies on behalf of the investors. Instead, Quartararo stole the funds and used them for his own personal benefit, including for payments on a Maserati, and for the benefit of the four relief defendants: his father, Leonard Quartararo; his girlfriend, Lisa Eckert; his business associate, Paul Casella, a convicted felon and former broker who was also barred by FINRA; and Casella's company, Private Equity Solutions, Inc.

The complaint, filed in the U.S. District Court for the Eastern District of New York, charges Quartararo with violating the antifraud provisions of Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. The complaint seeks disgorgement of ill-gotten gains with prejudgment interest from Quartararo and the four relief defendants, as well as an injunction and civil penalty against Quartararo.

The SEC's investigation was conducted by Vanessa De Simone and Bennett Ellenbogen, with assistance from Elizabeth Baier, and was supervised by Lara S. Mehraban, of the SEC's New York Regional Office. Mr. Ellenbogen will lead the litigation. The SEC appreciates the assistance of the Nassau County District Attorney's Office.