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…