Pre-IPO investments are often marketed with one powerful idea: access.

For many investors, the opportunity to invest in a private company before it goes public can sound exclusive, sophisticated, and time-sensitive. But that same sense of exclusivity can also create the perfect environment for abuse, especially when investors are told they are gaining exposure to shares in high-profile private companies that may be difficult, or impossible, to independently verify.

Recent allegations involving Forge Securities LLC, Sestante Capital LLC, and NextGenTech Investments LLC highlight the growing risks surrounding private-market and pre-IPO investment offerings.

According to the U.S. Department of Justice, Giovanni Pennetta, the manager of Sestante Capital LLC, pleaded guilty to wire fraud in connection with a scheme that induced investors to contribute millions of dollars for supposed economic exposure to shares of non-public companies (DOJ guilty plea — Giovanni Pennetta / Sestante Capital / NextGenTech pre-IPO scheme). Prosecutors stated that Pennetta misappropriated more than $10 million in investor funds, moving much of the money into his personal bank account rather than using it as represented.

The case has now drawn attention to a broader question: if registered brokers or broker-dealers helped introduce investors to these private-market opportunities, what due diligence was performed before client money was placed at risk?

The Alleged Pre-IPO Scheme

Federal authorities alleged that Pennetta falsely represented that he had access to shares of private companies and could provide investors with economic exposure through fund structures he controlled (DOJ original charges — pre-IPO fraud scheme). The DOJ initially charged him with securities fraud, wire fraud, and aggravated identity theft before he later pleaded guilty to one count of wire fraud.

Reuters reported that the alleged scheme involved purported access to pre-IPO shares of Anduril Industries, a private defense technology company (Reuters — Anduril pre-IPO fraud allegations). Anduril has publicly warned that investment offers not coming from or through the company are very likely scams, underscoring the difficulty investors face when trying to verify private-company share access.

For investors, the issue is not only whether Pennetta committed fraud. The deeper issue is whether any regulated financial professionals helped investors enter the alleged scheme without properly verifying the investment, the issuer, the fund structure, or the claimed access to private shares.

Why Forge Securities Is Now Part of the Discussion

Forge Securities LLC is a FINRA-registered broker-dealer associated with private-market transactions. FINRA BrokerCheck identifies Forge Securities LLC under CRD #134596 (FINRA BrokerCheck — Forge Securities LLC, CRD #134596).

The concern now being raised is whether investors were introduced to Sestante Capital or NextGenTech Investments through brokers affiliated with Forge Securities or related private-market channels. If a registered broker recommended, facilitated, or helped route client money into an outside pre-IPO fund, the broker’s obligations may not disappear simply because the investment was private, complex, or offered through a third-party structure.

That distinction matters.

Broker-dealers are not merely order-takers when they make recommendations. Under SEC Regulation Best Interest, broker-dealers must act in the best interest of retail customers when making securities recommendations and must exercise reasonable diligence, care, and skill (SEC — Regulation Best Interest guide).

FINRA has also reminded member firms that private placements require meaningful review. In Regulatory Notice 23-08, FINRA emphasized that firms recommending private placements must conduct a reasonable investigation of the security and its issuer, and that this obligation is rooted in Regulation Best Interest and FINRA Rule 2111 (FINRA Regulatory Notice 23-08 — private placement due diligence obligations).

What Due Diligence Should Have Looked Like

In a pre-IPO investment involving a private company, due diligence should not be superficial. A broker-dealer evaluating a private fund or secondary-market opportunity should be asking basic but critical questions:

  • Was there actual access to the underlying private shares?

  • Were the shares owned, allocated, or contractually available?

  • Who controlled the fund structure?

  • Where were investor funds being wired?

  • Were offering documents independently verified?

  • Were investors told about liquidity limits, valuation uncertainty, transfer restrictions, and the possibility that the investment could not be redeemed?

These are not minor details. In pre-IPO investing, the entire value proposition often depends on whether the promised access is real.

When investors are told they are gaining exposure to a high-profile private company, they may reasonably assume that a registered broker or broker-dealer has performed a meaningful review. If that review was inadequate, the investor may have legal claims separate from the criminal case against the alleged fraudster.

Private Markets Create Unique Investor Risks

Private-market investing has expanded rapidly as many high-value companies remain private longer. This has increased investor demand for access to companies before an IPO.

But private securities are different from publicly traded stocks. They are often illiquid, difficult to value, and subject to transfer restrictions. Investors may not receive the same level of public disclosure that exists in the public markets. That lack of transparency can make fraud harder to detect and easier to package as “exclusive access.”

Reuters noted that scams targeting pre-IPO investments have become more common as companies such as OpenAI, SpaceX, and Anduril remain private while attracting significant investor interest (Reuters — Anduril pre-IPO fraud allegations).

For investors, this creates a dangerous combination: high demand, limited supply, limited transparency, and sophisticated marketing. Additional regulatory warnings regarding firm oversight responsibilities highlight that unvetted private offerings continue to be an enforcement priority (FINRA 2026 Annual Regulatory Oversight Report — private placements).

Potential Claims for Investors

Investors who were placed into Sestante Capital, NextGenTech Investments, or similar pre-IPO offerings through a broker may have potential claims involving:

  • Failure to conduct adequate due diligence

  • Unsuitable investment recommendations

  • Misrepresentation or omission of material facts

  • Failure to supervise registered representatives

  • Regulation Best Interest violations

  • Negligent referral or facilitation of private securities transactions

  • Failure to identify red flags in fund documents, wiring instructions, or claimed share access

These claims are often pursued through FINRA arbitration when a registered broker-dealer or associated person was involved.

Importantly, a criminal guilty plea does not automatically recover investor losses. Criminal proceedings may punish wrongdoing, but investors often need to pursue separate recovery claims against responsible parties, including broker-dealers, supervisors, or other intermediaries who may have failed to protect them.

What Investors Should Do Now

Investors who purchased interests in Sestante Capital, NextGenTech Investments, or any pre-IPO fund through a broker should preserve all records immediately.

Important documents may include subscription agreements, offering memoranda, pitch decks, emails, text messages, wire confirmations, account statements, broker communications, and any documents referencing Anduril, SpaceX, OpenAI, or other private-company share exposure.

Investors should also identify who introduced the investment, whether any broker or firm received compensation, and whether the investment was presented as vetted, approved, exclusive, or time-sensitive.

These details may be critical in determining whether losses were caused only by the alleged fraudster or also by failures in the regulated brokerage process.

Sonn Law Group Is Reviewing Pre-IPO Investment Loss Claims

Sonn Law Group represents investors nationwide in securities fraud, FINRA arbitration, and investment loss recovery matters.

If you invested in Sestante Capital, NextGenTech Investments, or another pre-IPO offering through a broker or private-market platform, you may have legal options. A structured review can help determine whether your losses may be recoverable through FINRA arbitration or other claims against responsible parties.