U.S. Securities and Exchange Commission (SEC) Sues Management Firm on SpaceX Equity Fund Fraud Charges, Alleging Fund Lost Entire SpaceX Stake Over Unpaid $46,020

United States

On September 30, 2026, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit in federal court against New York-based Meyer Global Management LLC (MGM) and its founder and CEO Owen E.H. Meyer over allegations of fraud involving the sale of funds purportedly investing in SpaceX equity. The SEC alleges that the Starship X fund had all of its SpaceX shares forfeited because it failed to satisfy a $46,020 capital call, losing nearly $3 million invested by clients. The SEC further alleges that the asset manager failed to disclose this fact to investors and, on June 12, 2026, when SpaceX went public, sent an email telling investors who had no shares to receive to "stay tuned for further news regarding your stock distribution." The SEC alleges there were at least five such fraudulent schemes. All of these statements are allegations made by the SEC in its complaint at the outset of litigation, and no ruling has been issued.

SpaceX Is the Target Investment Subject to Harm, and the Defendants Are a New York One-Person Asset Manager

The plaintiff is the SEC, and the defendants are MGM and Meyer. SpaceX is not a defendant. The SEC's complaint refers to SpaceX only as a private company in which the funds sought to hold equity and makes no allegation of wrongdoing by SpaceX. In addition to SpaceX, pre-IPO companies such as OpenAI, Neuralink, Destinus, and Relativity Space appear in the complaint in the same manner. On the same day, the SEC issued Press Release 2026-98 alongside Litigation Release LR-26659, and the case was filed in the U.S. District Court for the Southern District of New York under case number 1:26-cv-08607.

The defendants' operation was small in scale. The SEC noted that MGM managed approximately 16 private funds, each structured to hold equity in a single private company. Meyer, 35, is the firm's sole owner and sole full-time employee, the SEC stated. The regulatory assets under management reported by MGM to regulators peaked at $34.33 million between 2022 and 2025 and stood at $25.33 million in 2026. The SEC alleges that from 2019 to 2024, the two defendants raised at least $18.5 million from approximately 100 investors.

The SEC seeks permanent injunctions against future violations, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. For Meyer, the SEC also sought conduct-based injunctions barring him from associating with investment advisers or broker-dealers. The complaint did not specify the exact amounts of disgorgement or penalties and requested a jury trial. The defendants' arguments are not included in the documents released by the SEC.

Investors Bought Fund-of-Funds Interests, Not SpaceX Stock Directly

The structure outlined by the SEC in the complaint did not involve investors directly holding SpaceX shares in their own names. The SEC noted that Meyer established separate funds structured as special purpose vehicles (SPVs) to hold private company equity, with investors acting as limited partners with no operational or managerial control over each fund. What investors purchased were fund interests, not stock.

Nor did the funds hold SpaceX shares directly. The SEC noted that MGM's funds generally invested in other funds managed by third-party managers, which in turn held the shares directly or reinvested in yet another third-party fund. The structure flowed from the investor to the MGM fund, from the MGM fund to a third-party fund, and sometimes to another third-party fund above that, with SpaceX shares at the very end of the chain. Investors stood at the front of this chain.

Rather than having their names recorded on SpaceX's shareholder register, the equity interest was established only through intermediate fund documentation, which was held by the manager. The SEC explained that Meyer solicited investors through personal acquaintances, word-of-mouth, and business connections, meeting some on online marketplaces where pre-IPO shares are traded. Emails and account statements sent by the manager served as virtually the sole means of verification for investors, and the SEC alleges that these documents were false.

The SEC alleges that within this structure, a minuscule amount of money wiped out the entire equity position.

The SEC Alleges the Fund's Entire SpaceX Equity Was Forfeited After Missing a $46,020 Capital Call

The SEC stated that in early 2022, MGM raised approximately $3.125 million from three external investors to form the Starship X fund. The objective was to obtain SpaceX shares by purchasing an interest in a fund (designated in the complaint as Fund Y) managed by a third-party asset manager (Adviser C). According to the SEC, the agreement signed on February 3, 2022, included provisions for capital calls requiring investors to pay committed funds to cover fees and expenses for Fund Y, stipulating that failure to pay could result in forfeiture of the investment interest. The SEC noted that the defendants satisfied the calls on behalf of the fund in 2022 and 2023.

What the SEC took issue with was a capital call dated January 3, 2024, in the amount of $46,020. The SEC alleges that the defendants failed to ensure this amount was paid, and as a result, Starship X never paid it. Fund Y issued default notices three times: on February 9, March 22, and July 9, 2024. When the defendants did not respond, Fund Y filed a lawsuit in Florida state court on October 1, 2024, and the SEC alleges that the defendants failed even to file an answer. The court issued a declaratory judgment on November 19, 2024, forfeiting all of Starship X's SpaceX equity to Fund Y, leaving the fund with zero or virtually zero assets, according to the SEC.

The $46,020 represented roughly 1.5% of the approximately $3.125 million raised by the fund—a calculated figure. Roughly 68 times the demanded amount was at stake, also a calculated figure. In its press release, the SEC described the fund's forfeited investment as "nearly $3 million." The SEC alleged that this constituted a breach of fiduciary duty by the asset manager. An adviser obligated to manage the fund for the benefit of investors failed to handle a single capital call and did not respond to three notices or the lawsuit. There were 321 days between the date the call was issued and the date of the court ruling, another calculated figure.

The SEC Alleges Investors with No Shares Were Emailed on IPO Day to Wait for Distribution News

The SEC alleges that the defendants informed investors neither of the nonpayment nor of the lawsuit. According to the complaint, on October 29, 2024, the defendants charged the largest investor holding 94.1% of Starship X a $10,000 fee to transfer part of the individual's holding to a family trust. The SEC noted that this occurred nearly a month after Fund Y initiated default proceedings.

The SEC further alleges that in December 2024, after the court entered judgment against Starship X, the defendants issued a new interest certificate to the same investor. The equity was already worthless, yet the defendants failed to disclose this. The complaint stated that the largest investor learned of the Florida lawsuit and the equity forfeiture only in December 2025, after receiving inconsistent and vague communications from the defendants and hiring an attorney to investigate. The interval between the ruling date and early December 2025 was approximately one year, a calculated figure.

The SEC alleges that on June 12, 2026, the day SpaceX went public, the defendants sent an email to Starship fund investors. Quoted in the complaint, the email spoke of "a dream many have followed for years," writing, "Today, we have the opportunity to participate in what I believe will be one of the most important companies of our generation," and concluded with the line, "Please stay tuned for further news regarding your stock distribution." The SEC alleges that this statement was false and misleading. Starship X had no SpaceX shares to distribute at the time. The SEC alleges that all investors in this fund lost their entire investments.

The time from the ruling date to this email was 570 days, or approximately one and a half years—a calculated figure. The SEC alleges that the distribution investors were told to stay tuned for on the day of the public listing never existed in the first place.

Starship X is the fifth scheme described in the complaint, and the SEC alleges that the same mechanics were used in different ways in the preceding four instances.

The SEC Alleges Starship VI Investors Failed to Acquire Equity but Were Notified It Had "Closed"

The first scheme addressed in the SEC complaint concerns the Starship VI fund in 2021. The SEC explained that in February and March 2021, MGM raised approximately $1.1 million from 13 individual investors under the representation that it would invest in SpaceX, and in mid-March signed an agreement to purchase an interest in another fund (Fund X) held by a third-party company (Company A), wiring $1.035 million. The SEC noted that under Fund X's operating agreement, this transaction required the approval of Fund X's manager.

According to the SEC, approval was never granted. On April 2, 2021, the manager of Fund X advised by email that "we cannot accommodate the transfer here," and the defendants obtained neither an interest in Fund X nor the underlying SpaceX shares. The SEC alleges that despite this, on June 29, 2021, Meyer sent an email to investors titled "Starship VI - Closed!" informing them that the fund's investment had closed. This was 88 days after the rejection notice, a calculated figure. The SEC alleges that this communication was false.

The SEC alleges that while money was returned, it did not go to investors. The SEC noted that Company A returned at least $600,000 in total to accounts of Meyer-affiliated entities in December 2021 and December 2022. Because this entity contributed only about 5% of the Starship VI capital, the most it was entitled to retain was roughly $30,000, and the SEC alleges that the defendants misappropriated the remaining $570,000. Among the uses cited by the SEC from the initial $500,000 returned in January 2022 were $220,000 transferred to Meyer's personal account, approximately $70,000 invested in Destinus (an investment target of another fund), and $105,000 in MGM payments unrelated to any SpaceX investment. The SEC alleges that throughout this time and up through September 2024, the defendants continued to send statements and notices claiming the equity value was increasing. According to the SEC, the fund had failed to acquire any shares, yet investors were led to believe their holdings were appreciating.

The SEC Alleges Assurances of Safety Were Repeated While Funds Had Already Been Spent

The next two cases involve a single fund (Meyer Global Partners I, MGP I) soliciting money while shifting its stated objectives. The SEC explained that this fund was created in early 2023 to purchase shares in online casino company PlayStar. Between March 27 and March 30, 2023, three investors wired $85,950, nearly all of which the SEC alleges the defendants spent on purposes unrelated to investments or permissible operating expenses. For example, the SEC noted that in April 2023, transfers of $35,000 and $30,000 were made to Meyer's personal account and used to pay legal fees unrelated to the fund.

The PlayStar investment never materialized. According to the SEC, on July 5, 2023, the defendants told the largest investor that while the investment fell through, "your funds are safe in the fund," and on July 8 sent a text message assuring that "I guarantee your investment is safe." The SEC alleges that this account had a balance of $0 from May 3 through August 3. The funds were not returned to investors until December 28, 2023. The SEC characterized this as an undisclosed, interest-free loan of $85,950 spanning several months.

In March 2024, the same fund shifted its objective to investing in OpenAI shares, and the SEC alleges that once again the promised investment did not occur. Citing Meyer's own sworn testimony, the complaint noted that the acquisition of OpenAI shares fell through in March 2024. Nevertheless, between April 8 and April 18, six investors wired $1,097,500, and the SEC alleges the defendants failed to disclose the failure of the deal to investors for approximately six months. The SEC noted that on July 19, 2024, an email was sent stating in substance that "the investment is kept secure."

The SEC alleges that net transfers of approximately $168,000 were made from this account to Meyer's personal account. Because the agreed management fee with investors was approximately $54,000, the SEC stated that he took more than triple the agreed fee. The SEC alleges that around October 2024, the defendants offered investors the option to reinvest in OpenAI at a higher valuation or receive a refund, but by then the fund was already short by approximately $130,000. Of the six investors, only three received full or near-full refunds of their capital. Returning funds to the remaining three would have required approximately $195,000, but as of March 19, 2025, the remaining balance in the account was only about $15,600, according to the complaint.

The SEC Alleges Approximately $686,000 in Liquidation Settlement Funds Were Withheld from Investors

The next case involves investor money from three funds that have already been liquidated: Starship IV, V, and VII. The SEC explained that MGM raised approximately $5.6 million across these three funds from about 45 investors and invested in a fund managed by Adviser A. Around January 2025, Adviser A wound down and liquidated this investment. Entangled in this process was a separate settlement agreement that Meyer's side had entered into with another investment adviser. The SEC explained that while this settlement was not supposed to touch fund and investor assets, a third-party Receiver handled the liquidation proceeds to divide up fees and carried interest owed to Meyer's firm.

According to the SEC, in mid-November 2025, the Receiver wired $13,829,158 to an account of a Meyer-affiliated entity, funds that were intended entirely for the three funds and their investors. However, the SEC alleges that the defendants disbursed only approximately $13,142,522 to investors. Of the remaining $686,636, $50,000 went to an individual who invested in an unrelated fund, and approximately $636,406 went into Meyer's personal account between November 2025 and July 2026. The shortfall represents approximately 5% of the total amount that should have been received, a calculated figure.

The SEC also took issue with the conditions placed on receiving the funds. Before disbursing the distributions, the defendants required investors to sign a release waiving all liability related to the investments, which obliged them to accept the amounts calculated by the defendants as the "sole and authoritative determination" of their final payout, the SEC noted. The SEC alleges that these amounts were approximately 5% lower than the figures Meyer submitted to the Receiver, a fact of which investors were unaware. In the complaint, the SEC characterized this as the defendants holding part of the settlement proceeds hostage.

The SEC Stated It Targeted a Pattern of Conduct Rather Than an Isolated Mistake

Corey A. Schuster, Co-Chief of the Asset Management Unit in the SEC's Division of Enforcement, said in the press release that this case serves as a reminder that "fraudsters can target retail investors by capitalizing on the allure of exclusive, lucrative pre-IPO investment opportunities." Schuster added that the SEC alleges the defendants, despite being investment advisers acting as fiduciaries to their clients, engaged in multiple fraudulent schemes to benefit themselves. The SEC alleges that there were at least five schemes from December 2021 to the present, in three of which the defendants misappropriated at least $1.27 million from client fund assets.

The SEC charged violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC alleges that all of these acts fall under a unified pattern of MGM and Meyer breaching the fiduciary duties they owed to the funds and investors. The complaint summarized these actions as spending funds or losing equity while assuring investors their investments were safe or appreciating.

This case was brought by the SEC not over misconduct by SpaceX, but over an asset manager who claimed to be investing in SpaceX. Due to the fund-of-funds structure, investors in funds carrying the names of popular pre-IPO companies relied solely on the manager's representations to know where their money went. Whether the court will accept these allegations will be determined in subsequent proceedings. The next stage of the litigation will determine whether the permanent injunctions, disgorgement, civil penalties, and conduct-based injunction against Meyer sought by the SEC will be granted.

Sources (KST)

• U.S. Securities and Exchange Commission (SEC) Press Release 2026-98 "SEC Charges Meyer Global Management and Its CEO with Defrauding Retail Investors in Private Funds Held Interests" (2026-09-30): https://www.sec.gov/newsroom/press-releases/2026-98-sec-charges-meyer-global-management-its-ceo-defrauding-retail-investors-private-funds-held-interests
• SEC Litigation Release LR-26659: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26659