The Securities and Exchange Commission is taking the hammer down on private fund advisers who allegedly mishandled millions in investor assets under the guise of giving them lucrative pre-IPO stakes in sought-after startups like OpenAI, SpaceX and others.
The SEC alleges several fund advisers allegedly misled small investors – including Navy veterans – about where the millions they thought they were investing actually went, according to two cases announced Wednesday. One advisor raised money for funds intended to hold OpenAI and SpaceX stocks, while the other pair alerted investors to SandboxAQ and Kraken while falsely claiming to hold shares in SpaceX and xAI. None of the actual companies or the executives running them are accused of engaging in any wrongdoing.
The SEC has filed a series of charges related to pre-IPO holdings, misappropriation of investor funds and hidden fees in recent months following SpaceX’s blockbuster $1.8 trillion initial public offering in June. Other current ones Fees have claimed that hundreds of investors have been lured by claims that private fund advisers can give them access to companies such as Anduril, Anthropic, Perplexity and others as valuations have skyrocketed.
In a high-profile case announced Wednesday, the SEC sued 35-year-old Owen Meyer and his company, Meyer Global Management, in federal court in Manhattan, alleging that Meyer raised at least $18.5 million from nearly 100 investors while embezzling at least $1.27 million in client funds. Additionally, the SEC alleges that Meyer spent more than $18,000 of fund capital on his “personal entertainment” at a strip club on an April 2023 evening that extended into the early morning hours.
Meyer allegedly attempted to pay a $4,400 bill to the club using a Meyer Global Partners debit card at 4:41 a.m. but was declined twice, the SEC alleges. Just a few minutes later, Meyer transferred $10,000 from a fund account that only contained investor money to the Meyer Global Partners account. He then allegedly paid the club $4,400 at 4:44 a.m. and then another $3,650 at 5:30 a.m. for receipts that listed drinks, “entertainment room rental fees” and the name of Meyer’s cocktail waiter at the club, the SEC alleges.
That same night, Meyer allegedly transferred $10,000 directly from the same fund account that contained investor funds that had been collected to purchase shares in online casino operator Playstar. He transferred the money to the strip club manager, the SEC alleges. The note lines accompanying the payments read “movie tickets and theater performance” and “opera.” The SEC alleges that the strip club’s manager testified that “Meyer visited the club alone, not with any business associates or friends, and that Meyer’s payments to him personally may have been due to Meyer having difficulty paying with his own credit card or may have been a tip to him as manager,” the complaint states.
When asked by SEC staff about the transfer of $10,000 from the fund account, Meyer invoked his Fifth Amendment rights against self-incrimination, the SEC said. Meyer did not respond to a request for comment. The SEC called it an undisclosed “interest-free loan” because Playstar investors eventually got their money back.
In a second case announced Wednesday, the SEC and federal prosecutors charged former Navy officers Christopher Dinelli, 34, and Jacob Frankel, 32, with defrauding 35 investors of more than $8.7 million through their company, Beyond Alpha Ventures. Its marketing falsely listed SpaceX and xAI as holdings, the SEC alleges, even though the funds never held investments in those companies.
Authorities allege Dinelli and Frankel solicited investors for a trading fund with a net return of “153%” plus pre-IPO shares in crypto exchange Kraken and AI software company SandboxAQ, chaired by former Google CEO Eric Schmidt. Neither company is accused of wrongdoing. The SEC alleges the trading fund lost money in 13 of 14 months and received less than half of the nearly $6 million raised in pre-IPO deals. Much of the remainder went into options trading that was later lost, the complaint says. The two allegedly sent fake statements to investors, including one that Dinelli allegedly “hand-delivered” to a Navy veteran couple that said their $750,000 investment had grown to $4.1 million.
The SEC alleges Dinelli allegedly embezzled more than $1 million, including a $250,000 investment in a documentary, and Frankel allegedly embezzled more than $340,000, in part to trade in accounts he controlled and to pay his criminal defense attorney.
In a telephone interview, Frankel disputed the SEC’s claims, calling them “completely false” and saying the “truth will emerge in court.” Frankel said he terminated Dinelli “two years ago” and blamed him for the allegations. The SEC’s complaint states that Dinelli was chairman of Beyond Alpha Ventures until July 2025.
Dinelli did not respond to a request for comment. Frankel was convicted in March 2026 of grand larceny and identity theft. The SEC alleges that Frankel concealed this belief in his required disclosures to regulators.
The mechanics
In both cases, regulators allege that the fund advisers marketed themselves as having access to investments in high-profile private companies. All allegedly sent investors fake statements and notices claiming their investments were either safe and sound or growing quickly.
In Meyer’s case, the SEC alleges he set up 16 funds, each of which bought shares in a pre-IPO company, mostly SpaceX led by Elon Musk, in addition to OpenAI led by Sam Altman, which remains private.
According to the SEC, Meyer set up a fund to invest in OpenAI but never received any OpenAI shares. Meyer testified that a deal to acquire OpenAI assets fell through in March 2024, yet six investors transferred nearly $1.1 million in April and did not learn there was no investment for about six months. The SEC alleges Meyer paid himself about $168,000 in fees anyway, more than three times what investors agreed to, and some of that went toward landscaping his home in Setauket, New York. Only about $15,600 remains in the fund, according to the SEC.
Regarding his SpaceX funds, Meyer told investors in 2021 that a large purchase of SpaceX assets had been completed, even though the third-party fund that held the shares would not agree to the transfer, the complaint says. In the end, Meyer allegedly embezzled approximately $570,000, including $100,000 for a personal investment in an exotic car company and $220,000 that was transferred to his personal bank account.
In 2025, when three other SpaceX funds were liquidated, Meyer allegedly transferred approximately $636,000 intended for investors to his personal account. He reportedly spent thousands shopping at Bloomingdale’s and AmazonThe complaint says he allegedly sent $86,000 to his father. Another fund forfeited its entire SpaceX stake after Meyer allegedly failed to pay a $46,000 capital call or respond to a lawsuit, the complaint says. The SEC noted that approximately $13.1 million was returned to investors following the liquidation.
On the day of SpaceX’s IPO on June 12, Meyer sent an email to investors in his SpaceX funds, including the fund that lost its stake.
“This is a dream that many of us have pursued for years, and today we have the opportunity to participate in what I believe to be one of the most important ventures of our generation,” Meyer wrote, according to the complaint. Meyer concluded the message by asking people to “stay tuned” for updates on their distributions. The fund did not hold any SpaceX shares for distribution, the SEC said. The SEC is seeking to ban Meyer from the industry as well as disgorgement and penalties.
In the second case, the SEC alleges that Marine veteran Dinelli allegedly recruited fellow veterans and medical staff at a Veterans Affairs clinic in Pensacola, Florida, where he was a patient, the complaint says. Meanwhile, Frankel allegedly lost $2.8 million on margin trading in the fund’s brokerage account, including $1.9 million on a single options trade, the complaint says.
Prosecutors charged Dinelli and Frankel with securities fraud, wire fraud and conspiracy. Frankel also faces investment advisor fraud and false statements charges over SEC filings that allegedly concealed his conviction and a suspension from Finra.