Founder of Pre-IPO Share Seller Charged in $88.6 Million Fraud

The founder of Prior2IPO, which marketed investments in private companies that might go public, was charged with fraud in New York for what US prosecutors said were $88.6 million in exorbitant markups on share purchases.

Raymond Pirrello Jr., 47, of Sparta, New Jersey, was named in a three-count indictment in federal court in Brooklyn, New York. Separately, the US Securities and Exchange Commission sued Pirrello and four others Wednesday, accusing them of misleading more than 4,000 investors.

Pirrello was charged with securities fraud conspiracy, wire fraud conspiracy and securities fraud tied to offerings by Late Stage Management LLC through several ...