The U.S. Securities and Exchange Commission (SEC) is cracking down severely on private equity fund advisors. SEC claims that these advisors are suspected of misappropriating millions of dollars in investor assets under the guise of offering pre-IPO shares in popular startups such as OpenAI, SpaceX, and others.
Two separate cases announced on Wednesday by SEC revealed that multiple fund advisors were accused of deceiving ordinary investors – including Navy veterans – regarding where the millions of dollars they invested ultimately went. One advisor raised funds for funds holding shares in OpenAI and SpaceX, while another pair of advisors promoted SandboxAQ and Kraken to investors, yet falsely claimed to hold shares in SpaceX and xAI. SEC did not accuse these companies themselves or their executives of any improper conduct.
In recent months, SEC has raised a series of accusations against IPO regarding pre-existing equity issues, misappropriation of investor funds, and hidden fees. Prior to this, after SpaceX completed a deal worth $1.8 trillion in June, there was a noticeable increase in related law enforcement actions. Other recent accusations by SEC also state that, as valuations soared, hundreds of investors were lured by the promise of "investment opportunities in companies such as Anduril, Anthropic, Perplexity, etc."
On Wednesday, SEC filed a lawsuit in the Manhattan Federal Court against 35-year-old Owen Meyer and his company Meyer Global Management, alleging that Meyer raised at least $18.5 million from nearly 100 investors and simultaneously misappropriated at least $1.27 million in client funds. SEC also claimed that between a certain night in April 2023 and early the following morning, Meyer used over $18,000 in fund funds for his "personal entertainment" at a strip club.
According to SEC, Meyer attempted to pay the club's $4,400 bill using a debit card associated with Meyer Global Partners at 4:41 a.m., but both attempts were denied. A few minutes later, Meyer transferred $10,000 from a fund account that contained only investor funds to Meyer Global Partners's account. Subsequently, he paid $4,400 to the club at 4:44 and another $3,650 at 5:30. The relevant receipts listed items such as drinks and "entertainment booth rental fees," and also bore the name of Meyer, who is said to be a cocktail waitress at the club, according to SEC.
On the same evening, Meyer was also accused of transferring $10,000 directly from the same fund account. The funds in that account were originally raised from investors for the purpose of purchasing shares in the online casino operator Playstar. SEC claimed that this money was transferred to the manager of a strip club. The payment notes indicated "movie tickets and theater performances" as well as "opera." SEC stated that the club manager testified that "Meyer came to the club alone, not with any business partners or friends, and that the money paid directly to him was possibly due to Meyer's own credit card difficulties, or it could be a fee paid to him," according to the lawsuit.
SEC indicates that when staff asked about the $10,000 transferred from the fund account by Meyer, Meyer invoked the Fifth Amendment right to remain silent and not incriminate oneself. Meyer did not respond to requests for comment. SEC characterized this money as an undisclosed "interest-free loan," as Playstar investors eventually got their funds back.
In the second case announced on Wednesday, SEC and federal prosecutors accused former Navy officers Christopher Dinelli (34 years old) and Jacob Frankel (32 years old) of defrauding over $8.7 million from 35 investors through their company Beyond Alpha Ventures. SEC claimed that they falsely listed SpaceX and xAI as holdings in their marketing materials, but these funds never held any investments in the aforementioned company.
Authorities stated that Dinelli and Frankel promoted a trading fund to investors, claiming a net return rate of “153%”, and offered former shares of SandboxAQ, a software company founded by former Google CEO Eric Schmidt who also served as its chairman. SEC noted that these companies themselves were not accused of any improper conduct. SEC also mentioned that the trading fund incurred losses in 13 out of 14 months, and less than half of the nearly 6 million dollars raised for previous transactions was actually invested in these trades; the remainder was mostly lost later on in options trading.
The indictment alleges that the two individuals also sent forged statements to investors. One of these statements was allegedly "personally delivered" by Dinelli to a couple of Navy veterans, claiming that their investment of $750,000 had increased to $4.1 million.
According to SEC, Dinelli is suspected of misappropriating over $1 million, including $250,000 used to fund a documentary; Frankel is suspected of misappropriating over $340,000, with some of that amount used for transactions in accounts under his control and to pay for criminal defense attorneys' fees.
Frankel denied the accusations against SEC in a telephone interview, calling them "completely false," and stated that "the truth will be revealed in court." Frankel claimed that he fired Dinelli "two years ago" and blamed the accusations on that person. The indictment against SEC states that Dinelli served as the chairman of Beyond Alpha Ventures until July 2025.
Dinelli did not respond to the request for comment. Frankel was convicted of major theft and identity theft in March 2026. SEC claimed that Frankel concealed this conviction in the disclosure documents required by regulators.
Case Details
In these two cases, regulatory authorities accused these fund advisors of presenting themselves as having access to equity opportunities in highly recognizable private companies. SEC stated that they sent investors false account statements and communication information, claiming that the investments were either completely safe or were rapidly appreciating in value.
In the case of Meyer, SEC claimed to have established 16 funds, each used to purchase shares in a former company of IPO. The most notable ones were led by Elon Musk's SpaceX and OpenAI, which is still in a private state and is led by Sam Altman.
According to SEC, Meyer once established a fund that invested in OpenAI, but never acquired any shares of OpenAI. Meyer testified that a deal to acquire OpenAI assets in March 2024 fell through, yet six investors still transferred nearly $1.1 million in April, and it was not until about six months later that they were informed that there was no such investment at all. SEC stated that Meyer continued to pay him approximately $168,000 in fees, which is more than three times the amount agreed upon by the investors. Part of this money was used for the maintenance of his residential garden in Setersek, Setauket (New York State). SEC mentioned that the fund now only has about $15,600 remaining.
As for his SpaceX fund, Meyer informed investors in 2021 that a large SpaceX asset purchase had been completed, although the third-party funds holding these shares did not approve the transfer, according to the indictment. SEC claims that Meyer ultimately misappropriated approximately $570,000, of which $100,000 was used for personal investment in a luxury car company, and $220,000 was transferred to his personal bank account.
In 2025, when three other SpaceX funds were liquidated, Meyer was accused of transferring approximately $636,000 in funds that should have been returned to investors into a personal account. He was also accused of spending thousands of dollars on Bloomingdale and Amazon, as well as transferring $86,000 to his father, according to the indictment. Another fund lost all its SpaceX holdings because Meyer failed to pay an additional $46,000 in margin requirements and did not respond to the lawsuit, the indictment states. SEC indicated that about $13.1 million was returned to investors after the liquidations.
On June 12th, SpaceX IPO, Meyer sent an email to the investors of its SpaceX fund, which included that fund for which they no longer held any positions.
"This is a dream that many of us have pursued for many years, and today we have the opportunity to be part of what I believe will become one of the most important companies of our generation," Meyer wrote in the email. According to the indictment, Meyer ended the email by asking investors to "look forward" to an update on the distribution. However, SEC stated that there were no SpaceX shares available for distribution at all. SEC is seeking to prohibit Meyer from continuing to practice their profession and is demanding the return of illicit gains and payment of a fine.
In the second case, SEC claimed that Navy veteran Dinelli allegedly recruited other veterans and medical staff at a Veterans Affairs clinic in Pensacola, Florida, at a time when he himself was also a patient at that clinic. Meanwhile, SEC stated that Frankel suffered a loss of $2.8 million in margin trading on his fund brokerage account, including a loss of $1.9 million from an options trade.
The prosecution has charged Dinelli and Frankel with securities fraud, wire fraud, and conspiracy. Frankel also faces allegations of investment advisory fraud and false statements, related to his concealment of convictions in the documents submitted by SEC and the suspension penalty imposed on Finra.
