Late Stage Capital accused of selling SpaceX shares without investor notification
A New Jersey-based investment firm is facing scrutiny after selling pre-IPO SpaceX shares for a client without prior warning, reducing the holding’s value from $300,000 to $45,450. Approximately 100 investors have lodged similar complaints with the US Securities and Exchange Commission.
Late Stage Capital, a New Jersey-based investment firm, has come under fire after selling pre-IPO shares of SpaceX for retail investor Ram Rupireddy without providing prior notification. The transaction significantly reduced the value of Rupireddy’s holding, dropping from approximately $300,000 to $45,450. Rupireddy is one of roughly 100 investors who have reported similar issues to the US Securities and Exchange Commission (SEC).
The dispute began when data engineer Ram Rupireddy wired $17,250 to Late Stage Capital in 2020 to purchase shares in the satellite company. At the time, SpaceX was valued at roughly $58 billion. By 2026, the company’s valuation had climbed to $1.77 trillion on its IPO day, leading Rupireddy to believe he held 2,500 shares worth approximately $300,000. However, access to the firm’s online portal was restricted, prompting further inquiries.
Late Stage Capital eventually informed Rupireddy that the shares had been sold in 2024 for a total value of $45,450. The investor received no advance warning of the sale. Complicating matters, tax documents provided by Late Stage Capital for the 2024 and 2025 tax years continued to list Rupireddy as the owner of the SpaceX shares, despite the transaction having occurred. The firm has not yet compensated Rupireddy for the loss.
The complexity of the ownership structure appears central to the issue. Late Stage Capital operates through special purpose vehicles (SPVs), which may not hold direct stakes in underlying companies. The Wall Street Journal identified a Bahamas-based firm, Capital Truth, which held a portion of an SPV that owned SpaceX shares. Late Stage Capital appears to have purchased a stake in this SPV from Capital Truth, creating a one-degree separation from the actual shares.
Jared Fine, a partner at the global law firm Davis Polk, highlighted the reliance on counterparty trust in such deals. The SEC had not responded to inquiries at the time of publication, and Moneywise received a mailer-daemon reply indicating that Late Stage Capital’s email address could not be found.
