The Late Stage Asset Management lawsuit is actually three parallel proceedings in the Eastern District of New York: a federal criminal prosecution, an SEC civil enforcement action, and an investor class action. Together they allege that the Montclair, New Jersey firm and its network of sales offices raised roughly $528 million from more than 4,000 investors between 2019 and 2023 by selling pre-IPO shares with hidden markups of up to 150%, after promising there were no upfront fees. Four defendants had pleaded guilty in the criminal case by March 2026. The SEC case and the class action remain active.
What the Company Is Accused of Doing
Late Stage marketed itself as a manager of private investment funds giving retail investors access to shares in companies expected to go public. Pitch materials and side letters signed by Managing Partner Marcello Follano told investors there were “no upfront fees whatsoever,” and that the firm would only earn a 20% carried interest if the target companies went public.1CCH/Business. Evangelista v. Late Stage Asset Management Class Action Complaint
According to the complaints, that was false. The defendants bought pre-IPO shares at one price and resold them to investors at markups reaching 150%, with pricing spreadsheets kept in a shared Dropbox folder so sales agents could see the spread. Investor money moved through Capital Truth Holdings LLC, which held the actual shares and skimmed the markup before distributing payments to the principals through separate corporate conduits. Pirrello received about $18.9 million through Valeo Capital Corporation between 2019 and 2022; Follano received about $10.3 million through Vero Enterprise Holdings LLC over the same period.2FindLaw. Evangelista v. Late Stage Asset Management, LLC
Sales agents initially drew investors in with recognizable names like Instacart and Marqeta. In the Instacart case, Late Stage collected investor funds but then failed to deliver shares after the company went public, the class action complaint alleges. Investors were then steered toward two obscure private companies, Green Life Farms, Inc. and Earth to Energy, Inc., which agents said were “on the verge of IPOs.” Neither has gone public. What investors were not told was that Pirrello was a founder and major shareholder of Green Life Farms, and Capital Truth held large stakes in both issuers, contradicting representations that the defendants were unaffiliated with them.2FindLaw. Evangelista v. Late Stage Asset Management, LLC
The alleged ringleader was Raymond J. Pirrello Jr., described in filings as an “un-papered” founder whose name was deliberately kept off Late Stage’s documents. Pirrello had been barred from the securities industry by the SEC in September 2019 after a federal jury in Atlanta found him liable for insider trading the month before.3SEC. Jury Finds New Jersey Securities Broker Liable for Insider Trading To hide his involvement from investors, he used aliases such as “Raymond John.” Late Stage itself was never registered with the SEC, and neither were its affiliated sales offices: Prior 2 IPO Inc., Pre IPO Marketing Inc., and JL Rivera Enterprises Ltd.4SEC. SEC Litigation Release LR-25907
The Federal Criminal Case
A federal grand jury in the Eastern District of New York returned a sealed indictment against Pirrello on December 5, 2023, charging conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud (Docket No. 23-CR-499).5Bloomberg Law. United States v. Pirrello Indictment A superseding indictment unsealed on February 13, 2025 added three more defendants: Robert Cassino, Joseph Passalaqua (the CEO of Prior2IPO), and Joseph Rivera.6DOJ. Three Sales Executives Charged in Connection With Pre-IPO Fraud Scheme
By early 2026, all four had pleaded guilty before District Judge Kiyo A. Matsumoto. Cassino pleaded guilty on February 18, 2026 to wire fraud conspiracy, which carries a maximum of 20 years. Pirrello and Passalaqua both pleaded guilty on March 3, 2026 to all three counts, each facing up to 45 years. Rivera had entered his plea earlier, though the DOJ announcement did not detail the date or counts. All four are awaiting sentencing.7DOJ. Three Sales Executives Plead Guilty in $500 Million Investment Fraud Scheme
The SEC Civil Action
The SEC filed its own case on December 6, 2023, one day after the criminal indictment was sealed. SEC v. Raymond J. Pirrello, Jr., et al., No. 23-cv-8953 (E.D.N.Y.), names five individuals — Pirrello, Follano, Cassino, Anthony DiTucci, and Rivera — along with Late Stage, Prior 2 IPO, Pre IPO Marketing, and JL Rivera Enterprises.8SEC. SEC Charges Five Individuals and Four Entities in Fraudulent Pre-IPO Scheme
The complaint charges violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, along with Sections 10(b), 15(a), and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer-and-director bars against all five individuals.4SEC. SEC Litigation Release LR-25907 As of mid-2025 the case remained pending.9GovInfo. SEC v. Pirrello et al, Case No. 23-8953
The Investor Class Action
Investor Armand Evangelista filed a putative class action on July 29, 2024: Evangelista v. Late Stage Asset Management, LLC, et al., No. 1:24-cv-05292 (E.D.N.Y.). The proposed class covers investors who purchased Late Stage securities between March 2019 and March 2023. Beyond the individuals and sales entities named in the SEC case, the class action also sues the financial conduit companies: Capital Truth Holdings, Valeo Capital Corporation, and Vero Enterprise Holdings. It names Joshua Cilano, president and sole managing member of Capital Truth, as one of the scheme’s “main architects.”1CCH/Business. Evangelista v. Late Stage Asset Management Class Action Complaint
The complaint brings claims under Section 10(b) of the Exchange Act and Rule 10b-5 against the “Scheme Defendants,” Section 20(a) against the “Control Defendants,” and Section 12(a) of the Securities Act against the “Offering Defendants.” It alleges the defendants took in more than $119 million in undisclosed markups and seeks compensatory and rescissory damages covering artificially inflated share prices, undelivered shares, worthless investments, and stolen markup fees.2FindLaw. Evangelista v. Late Stage Asset Management, LLC
Who Is Leading the Case
On May 28, 2025, Magistrate Judge Marcia M. Henry denied Evangelista’s motion to serve as lead plaintiff and appointed Jack Dean Pitman instead, based on his $2.32 million in alleged losses — the largest financial interest among the candidates. The court declined to aggregate the claims of the three-member Investor Group Pitman had joined. The Rosen Law Firm, P.A. was approved as lead counsel.2FindLaw. Evangelista v. Late Stage Asset Management, LLC
Where the Case Stands
In January 2026, District Judge Kiyo A. Matsumoto denied three motions to stay the class action without prejudice. Settlement discussions have since begun. In May 2026, Magistrate Judge Henry adjourned a scheduled settlement conference and ordered the defendants to respond in writing to the plaintiffs’ settlement demand by May 26, 2026, with a meet-and-confer by June 16, 2026, and a joint status letter due June 23, 2026. No class has been certified, and no settlement has been reached.10PACER Monitor. Evangelista v. Late Stage Asset Management, LLC et al
If You Invested Through Late Stage
The class action is the vehicle through which private investors can seek to recover losses. It is pending in the Eastern District of New York with The Rosen Law Firm as lead counsel and Jack Dean Pitman as lead plaintiff. The proposed class covers purchases of Late Stage securities from March 2019 through March 2023. No class has been certified yet, so no claim deadline has been set, and no settlement fund exists to file against. Investors who bought during that window and want to be counted should watch for a certification order and any court-approved notice that follows. Separately, the SEC’s civil action seeks disgorgement that could eventually feed a distribution fund, and any criminal restitution ordered at sentencing would come through the DOJ rather than the class action.