U.S. regulators have brought two separate cases alleging that private fund advisers diverted investors’ money, inflated account values and misrepresented investments marketed as access to sought-after private companies.
The cases concern intermediaries selling investment opportunities. OpenAI, SpaceX and their executives are not accused of wrongdoing.
Meyer accused of misusing client assets
In its September 30 complaint announcement, the SEC accused Meyer Global Management and CEO Owen E.H. Meyer of defrauding investors in funds holding SpaceX and other pre-IPO securities.
The regulator alleges that client assets paid personal expenses and that inflated account statements concealed misconduct. It also says investors were required to accept smaller distributions than they were owed to receive any money.
Separately, a fund allegedly forfeited a nearly $3 million SpaceX investment after the defendants repeatedly failed to resolve a funding shortfall. The SEC is seeking financial penalties, repayment of improperly obtained gains and injunctions.
Beyond Alpha case involves $8.7 million
In the second case, the SEC charged Christopher Dinelli and Jacob Frankel over an alleged scheme that raised more than $8.7 million from 35 investors through Beyond Alpha Ventures and its advisory firm.
Authorities say the pair promoted returns of up to 153% despite consistent trading losses. Money intended for pre-IPO investments allegedly went into brokerage accounts, where most of it was lost through unsuccessful options trades.
The SEC further alleges that Dinelli misappropriated over $1 million, while Frankel misappropriated over $340,000. Federal prosecutors have also brought parallel criminal charges.
Frankel denied the allegations to Fortune, calling them “completely false.” These remain allegations, not findings of guilt.
The intermediary matters
A recognisable company name can make an investment pitch compelling. It does not establish that a fund owns the promised shares, accurately reports their value or handles investors’ money properly.
Related: How to Avoid Financial Scams.
Access to a high-profile company is only as credible as the ownership records, fund structure and people handling the investment.
Disclosure: This article does not represent investment advice. The content is for informational and educational purposes only.
