SEC v. Raymond J. Pirrello, Jr.; Marcello Follano; Robert Cassino; Anthony DiTucci; Joseph Rivera; Prior 2 IPO Inc., et al., No. LR-25907, Eastern District of New York (Dec. 7, 2023) — Press Release
raw: Raymond J. Pirrello, Jr., et al.
Raymond J. Pirrello, Jr., et al., No. LR-25907 (E.D.N.Y. Dec. 7, 2023)
summary
The SEC charged Raymond J. Pirrello, Jr. and four associates with orchestrating a $528 million pre-IPO fraud scheme that pocketed $88 million in undisclosed markups.
paragraph
The SEC charged five individuals and four companies for raising at least $528 million from over 4,000 investors through unregistered pre-IPO securities offerings. Defendants allegedly concealed upfront markups as high as 150 percent, resulting in over $88 million in undisclosed fees. The charges include violations of federal antifraud, securities, and broker-dealer registration laws.
narrative
The SEC has charged Raymond J. Pirrello, Jr., four other individuals, and four companies for orchestrating a widespread pre-IPO fraud scheme. The defendants utilized a nationwide network of unregistered sales agents to raise at least $528 million from more than 4,000 global investors. While claiming no upfront fees were required, the group concealed markups as high as 150 percent, pocketing over $88 million. Pirrello specifically attempted to hide his prior SEC bar resulting from an insider trading liability. The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains, civil penalties, and officer and director bars. The litigation involves violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Classified pre-ipo-fraud(confidence 100%). EDGAR detection: forms S-1/Form D/1-A· recall 72% / precision 8%. detection rule →
Statutes
Sections 5(a), 5(c), and 17(a) of the Securities ActSections 5(a), 5(c), and 17(a) of the Securities ActSections 5(a), 5(c), and 17(a) of the Securities ActSections 15(a) and 10(b) of the Securities Exchange ActSections 15(a) and 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange CommissionRaymond J. Pirrello, Jr.Marcello FollanoRobert CassinoAnthony DiTucciJoseph RiveraPrior 2 IPO Inc.Late Stage Asset Management, LLCPre IPO Marketing Inc.JL Rivera Enterprises Ltd.
Keywords
secsecuritiespirrelloraymond pirrellosecurities exchangeexchangeunregisteredexchange commissionnewinvestorsraymondcompaniespre-ipoofferingsnetwork unregistered
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 2
- $528.00M $528 million $100M–$1B
- $88.00M $88 million $10M–$100M
Entities 2
- agency Securities and Exchange Commission
- agency the u.s. attorney’s office for the eastern district of new york and the fbi.
Triples 13
- Securities And Exchange Commission Announce Charges Against Raymond J. Pirrello, Jr., Marcello Follano, Robert Cassino, Anthony DiTucci, Joseph Rivera, and their New Jersey or New York-based companies Prior 2 IPO Inc., Late Stage Asset Management, LLC, Pre IPO Marketing Inc., and JL Rivera Enterprises Ltd.
- The Defendants Make Fraudulent Offerings Relating to investments in pre-initial public offering (IPO) companies.
- The Defendants Employ Nationwide Network Of unregistered sales agents to raise at least $528 million in unregistered offerings of pre-IPO securities from more than 4,000 investors around the world.
- The Defendants Falsely Tell Investors That there were no upfront fees on the offerings and that the defendants would only make a profit after the pre-IPO companies went public.
- The Defendants Charge Undisclosed Upfront Markups Some as high as 150 percent, from which the defendants and their network of unregistered sales agents pocketed more than $88 million.
- The SEC Allege That The Charged Individuals Went to great lengths to conceal the identity of one of the scheme’s ringleaders, Pirrello, from investors and potential employees to hide the fact that he was barred from associating with broker-dealers in an earlier administrative proceeding by the SEC, after a jury found him liable for insider trading in August 2019.
- The SEC File Complaint In the U.S. District Court for the Eastern District of New York, charging the five individuals and four entities with violations of the antifraud, securities and broker-dealer registration, and other provisions of the federal securities laws pursuant to Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
- Pirrello Be Charged With Control Person Liability Pursuant to Section 20(a) of the Exchange Act and violations of Section 15(b)(6)(B)(i) of the Exchange Act.
- The SEC Seek Permanent Injunctive Relief Disgorgement of allegedly ill-gotten gains with pre-judgment interest, and civil penalties against all of the defendants, as well as officer and director bars against Pirrello, Follano, Cassino, DiTucci, and Rivera.
- The SEC Conduct Investigation Being conducted by Karen M. Lee, Melissa a. Coppola, Zheng (Jane) He, and Gerald Gross of the New York Regional Office.
- The Matter Be Supervised By Mr. Pollock.
- The Litigation Be Led By Debra Jaroslawicz, Ms. Lee, and Ms. He.
- The SEC Appreciate Assistance Of The U.S. Attorney’s Office for the Eastern District of New York and the FBI.
PDF (from attached: complaint)
Text layers
Extracted body text (3,241c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25907 / December 7, 2023 Securities and Exchange Commission v. Raymond J. Pirrello, Jr., et al., No. 23-cv-8953 (E.D.N.Y. filed Dec. 6, 2023) SEC Charges Five Unregistered Brokers, Four Companies in Widespread Pre-IPO Fraud Scheme The Securities and Exchange Commission today announced charges against Raymond J. Pirrello, Jr., Marcello Follano, Robert Cassino, Anthony DiTucci, Joseph Rivera, and their New Jersey or New York-based companies Prior 2 IPO Inc., Late Stage Asset Management, LLC, Pre IPO Marketing Inc., and JL Rivera Enterprises Ltd. for making fraudulent offerings relating to investments in pre-initial public offering (IPO) companies. According to the SEC’s complaint, the defendants employed a nationwide network of unregistered sales agents to raise at least $528 million in unregistered offerings of pre-IPO securities from more than 4,000 investors around the world. The complaint alleges that the defendants falsely told investors that there were no upfront fees on the offerings and that the defendants would only make a profit after the pre-IPO companies went public; however, all investors were charged undisclosed upfront markups, some as high as 150 percent, from which the defendants and their network of unregistered sales agents pocketed more than $88 million. The SEC alleges that the charged individuals went to great lengths to conceal the identity of one of the scheme’s ringleaders, Pirrello, from investors and potential employees to hide the fact that he was barred from associating with broker-dealers in an earlier administrative proceeding by the SEC, after a jury found him liable for insider trading in August 2019. The SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, charges the five individuals and four entities with violations of the antifraud, securities and broker-dealer registration, and other provisions of the federal securities laws pursuant to Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Pirrello is also charged with control person liability pursuant to Section 20(a) of the Exchange Act and violations of Section 15(b)(6)(B)(i) of the Exchange Act. The SEC seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains with pre-judgment interest, and civil penalties against all of the defendants, as well as officer and director bars against Pirrello, Follano, Cassino, DiTucci, and Rivera. The SEC’s ongoing investigation is being conducted by Karen M. Lee, Melissa A. Coppola, Zheng (Jane) He, and Gerald Gross of the New York Regional Office. The matter is being supervised by Mr. Pollock. The litigation will be led by Debra Jaroslawicz, Ms. Lee, and Ms. He. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the FBI. Investors can learn more about the risks involved with investing in unregistered offerings by reading such SEC investor bulletins as 10 Red Flags That An Unregistered Offering May Be A Scam, Private Placements Under Regulation D, and Pre-IPO Investment Scams. SEC Complaint
OCR text (3,241c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25907 / December 7, 2023 Securities and Exchange Commission v. Raymond J. Pirrello, Jr., et al., No. 23-cv-8953 (E.D.N.Y. filed Dec. 6, 2023) SEC Charges Five Unregistered Brokers, Four Companies in Widespread Pre-IPO Fraud Scheme The Securities and Exchange Commission today announced charges against Raymond J. Pirrello, Jr., Marcello Follano, Robert Cassino, Anthony DiTucci, Joseph Rivera, and their New Jersey or New York-based companies Prior 2 IPO Inc., Late Stage Asset Management, LLC, Pre IPO Marketing Inc., and JL Rivera Enterprises Ltd. for making fraudulent offerings relating to investments in pre-initial public offering (IPO) companies. According to the SEC’s complaint, the defendants employed a nationwide network of unregistered sales agents to raise at least $528 million in unregistered offerings of pre-IPO securities from more than 4,000 investors around the world. The complaint alleges that the defendants falsely told investors that there were no upfront fees on the offerings and that the defendants would only make a profit after the pre-IPO companies went public; however, all investors were charged undisclosed upfront markups, some as high as 150 percent, from which the defendants and their network of unregistered sales agents pocketed more than $88 million. The SEC alleges that the charged individuals went to great lengths to conceal the identity of one of the scheme’s ringleaders, Pirrello, from investors and potential employees to hide the fact that he was barred from associating with broker-dealers in an earlier administrative proceeding by the SEC, after a jury found him liable for insider trading in August 2019. The SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, charges the five individuals and four entities with violations of the antifraud, securities and broker-dealer registration, and other provisions of the federal securities laws pursuant to Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Pirrello is also charged with control person liability pursuant to Section 20(a) of the Exchange Act and violations of Section 15(b)(6)(B)(i) of the Exchange Act. The SEC seeks permanent injunctive relief, disgorgement of allegedly ill-gotten gains with pre-judgment interest, and civil penalties against all of the defendants, as well as officer and director bars against Pirrello, Follano, Cassino, DiTucci, and Rivera. The SEC’s ongoing investigation is being conducted by Karen M. Lee, Melissa A. Coppola, Zheng (Jane) He, and Gerald Gross of the New York Regional Office. The matter is being supervised by Mr. Pollock. The litigation will be led by Debra Jaroslawicz, Ms. Lee, and Ms. He. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the FBI. Investors can learn more about the risks involved with investing in unregistered offerings by reading such SEC investor bulletins as 10 Red Flags That An Unregistered Offering May Be A Scam, Private Placements Under Regulation D, and Pre-IPO Investment Scams. SEC Complaint