Investors hoping to get a piece of the next big tech giant instead found their money funding late night outings at strip clubs and luxury shopping sprees, according to a series of lawsuits filed by the Securities and Exchange Commission. In two separate cases announced Wednesday, regulators alleged that private fund advisers tricked everyday investors, including military veterans, into believing they were buying pre-IPO shares in highly coveted companies like OpenAI and SpaceX. While these startups remain some of the most sought after assets in the financial world, the SEC claims the money never actually reached them.
One particularly egregious example involves Owen Meyer and his firm, Meyer Global Management. The SEC alleges that Meyer raised over 18 million dollars from nearly 100 clients but siphoned off more than a million for personal use. Most shocking were the details regarding a single night in April 2023, during which Meyer reportedly spent thousands of dollars at a strip club. After his corporate debit card was declined several times in the early morning hours, investigators say he transferred 10 thousand dollars from an investor fund to cover his tab. To hide the trail, he allegedly labeled payments to the club manager as expenses for opera tickets and theater performances.
In another case, former naval officer Christopher Dinelli and partner Jacob Frankel are accused of defrauding dozens of investors of roughly 8.7 million dollars through their firm, Beyond Alpha Ventures. Regulators claim the duo lied about holding stakes in Elon Musk’s xAI and SpaceX while sending out fabricated account statements showing astronomical gains. One veteran couple was allegedly handed a document claiming their 750 thousand dollar investment had ballooned to over four million dollars, even though much of the capital had actually been lost in failed options trading or diverted toward personal projects like a documentary film.
While These schemes leveraged the massive hype surrounding artificial intelligence and space exploration, officials clarified that neither OpenAI nor SpaceX were involved in any wrongdoing. Instead, these cases highlight a growing trend of fraudulent intermediaries promising exclusive access to private markets to lure in unsuspecting investors. While Jacob Frankel has denied the allegations and pointed fingers at his former partner, federal authorities continue to crack down on advisors who treat client portfolios like personal piggy banks.