SEC Charges Adit Ventures CEO and Firm in Pre-IPO Fraud Scheme

The U.S. Securities and Exchange Commission has charged New York-based investment adviser Adit Ventures Management LLC, its CEO Eric Munson, and three affiliated general partners with fraud. The agency alleges the defendants deceived investors and misappropriated client assets connected to investments in pre-IPO shares of companies such as SpaceX and Klarna.

According to the complaint filed in the U.S. District Court for the Southern District of New York, the scheme spanned from April 2019 through December 2024. The defendants allegedly used false claims to persuade investors to contribute capital, including Munson falsely asserting that a fund owned shares in a private company.

The SEC states the defendants regularly diverted client capital for personal benefit. This included taking unsecured loans from funds on favorable terms without authorization or disclosure. The complaint further alleges the defendants violated fiduciary duties by purchasing pre-IPO shares personally and then causing client funds to buy those same shares at higher prices.

Investors were reportedly misled about the true cost of these acquisitions. The defendants also allegedly overcharged client funds millions in unauthorized “acquisition fees.” Additionally, the firm improperly pledged client assets as collateral for a $10 million line of credit, which was used in part to settle the defendants’ own obligations.

“Investment advisers are entrusted with acting in their clients’ best interests,” said Corey A. Schuster, Chief of the Enforcement Division’s Asset Management Unit. “Here, the defendants allegedly engaged in repeated fraudulent acts to benefit or enrich themselves.”

The SEC charges Munson, Adit Ventures Management, and the general partners with violating antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. Adit Ventures Management is also charged with failing to register as an investment adviser.

Without admitting the allegations, the defendants consented to a judgment subject to court approval. They agreed to permanent injunctions against violating federal securities laws and to pay disgorgement with prejudgment interest and civil penalties, amounts to be determined by the court. Munson also accepted an associational bar, with the right to apply for reentry after three years.

The SEC acknowledged assistance from the Jersey Financial Services Commission in the case.