Regular readers of this newsletter will be quite familiar with some of the swindles and mischief that retail investors can face in the secondaries market, thanks to Allie’s diligent reporting on the subject. And with AI companies now moving towards record-setting IPOs—with valuations in the trillions of dollars—the demand for pre-IPO shares is greater than ever, as is the opportunity for deceit.
This week, the SEC revealed details of a couple of cases involving phantom pre-IPO shares of SpaceX, OpenAI, and other hot startups. Scores of mom-and-pop investors, including some Navy veterans, were among the victims of fund advisors who claimed to be investing in pre-IPO shares of the startups, according to the SEC.
