Pre-IPO Share Scams: Fraudsters Are Selling “Shares” of Companies About to Go Public
There's a fast-growing scam aimed squarely at investors who don't want to miss the next big thing: fake “pre-IPO” share offerings.A promoter contacts you out of the blue with a chance to buy shares of a hot private company — think the household names everyone expects to go public — beforeits IPO, at a “special” price. The pitch is urgent, the upside sounds enormous, and the shares frequently don't exist at all.
What's happening
The SEC's Office of Investor Education and Advocacy and FINRA have both warned that fraudsters are using cold calls, emails, texts, social-media ads, and direct messages to offer “pre-IPO” shares of well-known private companies. They lean on two classic tactics: “phantom riches”— dangling spectacular, “guaranteed” returns — and “scarcity”— a made-up deadline or limited “allocation” to rush you into wiring money before you can think it through. Some run organized “boiler rooms” of unregistered sales agents working from a script.
Often illegal, not just risky
Pre-IPO shares are not registered with the SEC, and unregistered securities generally can't be offered to the public unless a specific exemption applies — and most exemptions don't allow a company's stock to be broadly marketed to the general public. So a pre-IPO deal being pushed at everyday investors through an ad or a DM may be illegal on its face, before you even get to whether the shares are real. In many cases, FINRA warns, the sellers don't actually own the shares they're offering— and investor money goes to the scammer's own pocket, not toward buying any stock.
Red flags
- ✗An unsolicited offer — cold call, email, text, DM, or social-media ad — to buy “pre-IPO shares” of a hot private company
- ✗Claims that an IPO is “guaranteed” or imminent and that this is a rare chance to get in before it
- ✗Pressure to “act now” before the allocation “fills up” or the window “closes”
- ✗The seller isn’t a registered broker-dealer, or can’t prove the company authorized them to sell its stock
- ✗You’re asked to wire money to an individual or a personal account, or to pay in crypto or gift cards
- ✗A “fund” or “SPV” that supposedly holds the pre-IPO shares, with no proof the shares actually exist
How to protect yourself
- ✓Ignore unsolicited pre-IPO offers. Legitimate allocations don’t arrive in your inbox, your texts, or a stranger’s DM.
- ✓No one can guarantee an IPO. Nobody can promise a private company will go public — or when.
- ✓Verify the seller is a registered broker-dealer on FINRA BrokerCheck (brokercheck.finra.org), and check the company on SEC EDGAR and with your state securities regulator.
- ✓Know that pre-IPO offers broadly marketed to the public are often illegal — these securities aren’t registered, and most exemptions don’t allow general solicitation.
- ✓Legitimate pre-IPO shares are generally limited to verified accredited investors and trade only on regulated secondary markets (Forge, EquityZen, Nasdaq Private Market) — never through a DM.
- ✓Never send money to an individual. Funds for a real investment go to a registered firm or regulated custodian, never a personal account or wire.
- ✓Demand proof the shares exist and that the seller is authorized, and have an independent attorney review before you pay a dime.
Sources
This alert is provided for general awareness and educational purposes only and summarizes guidance from the SEC and FINRA as of October 3, 2026. It is not financial or legal advice, and it does not allege wrongdoing by any specific company named as an example of the kind of business these scams impersonate. Always do your own due diligence and report suspected fraud to the SEC at sec.gov/tcr.
Got a “pre-IPO” offer you're unsure about?
Run it through the free WardenPost Trust Score™ before you send a dollar.