The SEC revealed fraud cases involving phantom pre-IPO shares of SpaceX, OpenAI, and other high-demand startups. Fund advisors allegedly invested in these shares on behalf of retail investors, including U.S. Navy veterans, when they never actually purchased or owned any securities. In one case, 35 investors were defrauded of more than $8.7 million by Beyond Alpha Ventures, which promised 153% net returns and pre-IPO stakes in Kraken and SandboxAQ. In the other case, Owen Meyer used investor funds for losing options trades and personal expenses, including $18,000 at a strip club, with $4,400 charged at 4:44 a.m.
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