Beyond Alpha: Shares That Never Existed

DerekPicture this. Somebody emails you a chance to own a slice of a hot company before it goes public. Real shares, direct, no middleman. You're already reaching for your checkbook.

GrantI'm already reaching. Ten seconds in, and I'm a future millionaire.

DerekOkay, so get this. Manhattan prosecutors just unsealed an indictment saying the thing you'd be wiring money for wasn't there.

GrantWasn't there, like, delayed?

DerekWasn't there, like, not in the drawer. I'm Derek, this is Vaporware, and that's Grant, who is currently making a face.

GrantIt's my skeptical face. It gets a lot of use. So who are we talking about, and how much money?

DerekThe indictment names Jacob Frankel and Christopher Dinelli of Beyond Alpha Ventures. They allegedly took about eight point seven million dollars from roughly thirty-five investors.

GrantThirty-five people? That's not a stadium. That's a wedding reception with a very expensive gift table.

DerekOof, and the pitch had two parts: pre-IPO shares and a fund run on a proprietary AI algorithm. What was actually for sale is the whole question.

GrantAnd I'd say this plainly before anyone gets ahead of themselves. These are allegations. They're charged, not convicted.

DerekAbsolutely. Everything we say today is what prosecutors claim, and the defendants get their day in court.

GrantFine. But nobody wires seven figures on vibes alone. Somebody must have made this sound good, and I wanna know exactly how.

DerekOh, you're gonna love this part. It sounded very good. To see how anyone wired money, we need the pitch itself. Okay, so get this. The pitch had two doors, and you could walk through either one. Door one, direct shares in pre-IPO companies. Door two, a hedge fund run on a proprietary AI algorithm.

GrantDirect shares, not a fund that holds a fund that holds a special purpose vehicle.

DerekThat's what prosecutors allege was promised. Direct ownership in the private companies everyone was buzzing about.

GrantOh, man. That's the dream, right? You skip the line.

DerekYou skip the line. Think about how that lands. You read about a hot private company every week. You can't buy it on any exchange, and somebody tells you there's a side entrance. That's the whole emotional hook of pre-IPO. The stock isn't for sale to you, so anyone who says it is sounds like a friend with a key.

GrantA friend with a key. I'd guess the side entrance comes with a little urgency attached.

DerekI can't tell you what any investor felt because the record doesn't say. I'm only talking about why that kind of pitch is built the way it is.

GrantFair. Keep going.

DerekAnd door two was for people who wanted something that sounded like it came out of a lab, a proprietary AI-based trading algorithm.

GrantProprietary, the most beautiful word in fraud because nobody can ask to see it.

DerekCareful, we're on allegations here. But the word did a lotta work. It's a reason to show you nothing.

GrantWait. Nobody checked?

DerekHold that thought. Let's look at how the firm described itself first. Frankel has a profile on the Forbes Finance Council site, and it calls Beyond Alpha Ventures a multi-strategy family office and hedge fund.

GrantMulti-strategy. Sounds like they do everything.

DerekFounded in two thousand nineteen, according to that same page. And it says the fund uses, quote, "AI-based trading algorithms."

GrantOkay, and who wrote that page?

DerekGreat instinct. The profile is self-authored promotional material. It's the firm talking about the firm.

GrantSo it's a resume, not a reference.

DerekRight. And it adds that investors get regular performance updates.

GrantUpdates on what, though? If the trading engine is a black box and the updates come from the same people who run the box.

DerekThen the updates are just more pitch.

GrantThat's a restaurant handing you its own five-star review and calling it the health inspection.

DerekYes. And the listener has probably got two questions by now.

GrantOnly two. Were the shares real?

DerekAnd did the AI exist?

GrantEverything else is decoration, honestly.

DerekHold that because we're getting to the answers, but there's a wrinkle. Nobody wires money to a stranger's brochure.

GrantRight. So why did they wire it to these two?

DerekThe pitch was only half of it. The badges did the rest. Okay, so the badges. Start with the one on the firm's own website. It says Beyond Alpha was honored as the twenty twenty-five hedge fund to watch of the year.

GrantHonored by whom?

DerekWait for it. The page doesn't say. It just says it right next to a pitch about exclusive strategies in venture capital, private placements, and IPOs for elite clients.

GrantElite clients. Of course. Nobody ever advertises for the mediocre ones.

DerekThe velvet rope is doing a lotta work on that page.

GrantHold on, though. An award is an award. Somebody handed it over, didn't they?

DerekMaybe, but the source here is the firm's website describing the firm. That's a self-promotional claim, and it tells you nothing about whether the award meant anything.

GrantSo what would make an award like that mean something? What would you wanna see?

DerekWho chose the winner, what they measured, and whether anyone paid to be in the running. None of that is on the page, so the plaque stands alone.

GrantA trophy doesn't tell you who paid for the trophy case.

DerekAnd look at the wording. To Watch, not Hedge Fund that Delivered. Watching isn't auditing.

GrantFair. That's an invitation, not a report card. Say you're a stranger reading that line. What do you actually learn about the fund?

DerekThat someone wants you to look, not what the returns were, not who holds the assets, not whether anyone outside the firm checked a number. It's a headline with no body underneath.

GrantAnd the Forbes Finance Council name?

DerekSame resume, same caveat as before. It's a header, not verification, and I'll leave it there.

GrantRight. But here's my thing, Derek. Even if the award were real and the council were real, what does that prove?

DerekExactly the right question. A badge like that shows somebody got onto a platform, access, a nice logo, a spot on a list.

GrantAccess to a stage, not a check of the books.

DerekRight. Nobody on that stage opens the account statements. Nobody confirms the shares sit somewhere. The badge is a ticket in the door, and diligence is a different job entirely. So the question for any badge is what the badge giver actually checked.

GrantAnd if the answer is nothing, then it's decoration.

DerekPretty decoration, but yes. And I wanna be careful here. We don't know how any investor reacted to these badges.

GrantWe don't, and we shouldn't pretend. Whether anyone wired money because of a plaque is not in the record we have.

DerekAgreed. But the badges are what a stranger sees first.

GrantSo which makes it a fair thing to ask. Prosecutors have their own picture of this firm, and it doesn't come from a website.

DerekSo what did they say was actually behind the badges? Okay, so get this. Prosecutors announced charges described as a scheme to defraud investors seeking to invest in pre-IPO companies and a trading fund.

GrantSo that's the shares and the fund.

DerekRight. And as the indictment is described to us, prosecutors say the AI trading engine never existed.

GrantNever existed, as in not a weak engine, not a buggy engine.

DerekNo engine, per prosecutors.

GrantWell, it was certainly proprietary. Nobody else had one either.

DerekOh, stop. A- actually, give me a second, because the next part deserves a straight read.

GrantOkay. Going quiet. The shares, what was promised there?

DerekDirect shares in pre-IPO companies. That's the pitch prosecutors describe. And the charges are about investors who wanted to buy into exactly that.

GrantSo the two things the pitch was built on were the shares and the engine, and the engine, per prosecutors, wasn't there.

DerekRight. And these are allegations. Nobody has been convicted of anything.

GrantLet that sit for a second. And I wanna stay disciplined about what we don't know. We're not gonna guess where the money went.

DerekAgreed. The material I have doesn't say, so we leave it alone.

GrantSo what's the status? Is this just the indictment, or is there other legal action floating around?

DerekThere's a civil case, East Park Technologies Inc. and others versus Beyond Alpha Ventures LLC and others.

GrantWho's East Park?

DerekOkay, I can't tell you. The Justia docket page I've got gives the caption, the court, and the category. That's it.

GrantSo what do we actually know?

DerekIt was filed March 24th, 2026, in the Southern District of New York. Justia lists it as a fraud case.

GrantA caption, a court, a date, a label. That's a thin slice. How much should a listener read into that?

DerekNot much. I'm not going to tell you what's in that complaint because the docket excerpt doesn't say. No claims, no amounts, nothing about who's alleging what.

GrantGood. I'd rather you say nothing than guess. A docket listing tells you a case exists. It doesn't tell you who's right.

DerekSame. And honestly, this feels familiar. This is the sequel to a story we've told before with a different trick.

GrantOh, You're gonna make me say it. The one with Real Access and a Markup.

DerekWait for it, because this time, Prosecutors say there wasn't even a product to mark up. Okay, so get this. Not long ago, I'd have told you the Linqto story was the wild one.

GrantOh, the one we did? The pre-IPO platform?

DerekThat's the one. The SDNY press release says an indictment was unsealed against the founder, William Sarris, and the former CEO, Joseph Endoso, pleaded guilty.

GrantWait, guilty already? Not just charged?

DerekEndoso, yes. Sarris is the indictment, which is an allegation.

GrantFair. So what's the alleged trick there?

DerekLies about pricing. Prosecutors frame it as a pricing and markup fraud. So the allegations are about the pricing of pre-IPO securities.

GrantSo the product existed. The price was the lie.

DerekRight. I'm not gonna put a dollar figure on it beyond what the release says because I'm only reading what's in front of me.

GrantOkay. But then Beyond Alpha is a different animal. One is a gallery that inflates the price of a real painting. The other sells you a frame with nothing in it.

DerekExactly. The way we framed it for this episode, Linqto allegedly marked up real access. Beyond Alpha allegedly sold access plus an AI trading engine that prosecutors say never existed.

GrantHold on. So one is a markup, and the other is a mirage.

DerekAnd that changes what you check. With a markup, the question is what the price should be compared against. With a mirage, the question is where the thing is.

GrantWhich is a much more basic question, and weirdly a harder one to ask out loud because it sounds like you're accusing somebody of not having the goods.

DerekRight. Whereas asking about price just sounds like shopping around. Plot twist, though, same bait on both hooks.

GrantPre-IPO FOMO.

DerekYep. As we framed it, the SpaceX-era itch. I missed that one. I'm not missing the next one.

GrantAnd honestly, nobody wants to be the guy who passed.

DerekWhich is why it feels like a pattern across our episodes. Different costume every time. Last time, the costume was a platform with real names on the shelf.

GrantAnd this time, the shelf might have been empty.

DerekAllegedly. Prosecutors haven't proven that in court.

GrantRight. Right. But think about what that means for someone sitting at home with a wire form open. With Linqto, you'd need to compare the price to something. With this one-

DerekYou'd need to ask for the shares themselves or the trading engine. Just show me the thing.

GrantWhich sounds so obvious it's almost embarrassing. You'd be asking for the one thing the whole pitch is about.

DerekIt is obvious in hindsight. Nobody's embarrassed when the pitch is working on them, though.

GrantSo what's the practical version? Like, if I were one of those investors, what would a simple checklist have caught before the money moved?

DerekNow, that's a list worth building. Okay, so the checklist. Two government alerts, and they read like somebody's been peeking at this indictment. The first, the SEC's investor alert on pre-IPO scams from June 2024.

GrantWhat's on it?

DerekThe SEC's alert flags trendy sectors, and it names AI and crypto right there. It also flags claims that an IPO is imminent.

GrantOh, man. So AI plus pre-IPO is basically the two loudest alarm bells in one sentence.

DerekWait for it. There's a third one: unregistered offerings with no limits on who can invest.

GrantHold on. Why is that a flag? I think more investors means more legit.

DerekThe alert treats it as a warning sign. Our read is that a legitimate offering would be expected to care who's buying, and one that takes anybody's money looks like somebody's in a hurry.

GrantLike a club with no bouncer. Fine, but who cares? The deal still exists.

DerekDoes it, though? Here's the line that got me. The SEC says some fraudsters don't own the shares they're selling, and they spend the money on themselves.

GrantSo the shares are a rumor, and the money is a vacation.

DerekI'm stealing that. And to be clear, that's the SEC describing a pattern, and prosecutors allege a version of it here. None of it is a verdict.

GrantOkay. Second alert.

DerekA joint one from the SEC, NASAA, and FINRA on investment fraud riding AI hype. It warns about catchy AI buzzwords. Proprietary AI algorithm.

GrantNever heard that before.

DerekNever. It also lists guaranteed or outsized returns, plus high-pressure sales by people who aren't registered.

GrantRight, and that last one is checkable. You can look up whether a person is registered.

DerekExactly. And the alert adds promises of quick profit with little risk.

GrantLittle risk and big profit. That's the moment you put your wallet on.

DerekNow, I can't tell you what any of the roughly 32 investors saw or didn't see. The record I've got doesn't say. What I can do is turn those flags into questions Somebody could have asked before wiring a dime.

GrantGo.

DerekIs this offering registered? Who's selling it, and are they registered? Do you actually own the shares, and can I see proof? And what exactly is the AI doing with my money?

GrantOkay, but walk me through how you'd actually test each one.

DerekRegistration, ask the seller for the paperwork and for their own registration. Then confirm it with a regulator instead of taking their word for it. Ownership, ask for proof in writing from whoever holds the shares, not just from the person selling them. The AI, ask what it does, who built it, and whether anyone outside the firm has checked its results.

GrantAnd if the answer to how does it work is just the word Proprietary again...

DerekThen that's your answer.

GrantFour questions, maybe ten minutes of effort.

DerekWhich is what bugs me. Checklists are easy in hindsight, so why does the pitch still work?

GrantBecause nobody feels like a sucker while they're reading a checklist. They feel late.

DerekOkay, so you said it, Grant. Nobody feels like a sucker while they're reading a checklist. They feel late. Where does late come from?

GrantScarcity, mostly. I've skipped checks myself, and I've got a spreadsheet of expensive mistakes to prove it. So what's going on in the head?

DerekScarcity changes the job your brain thinks it's doing. When a seller says there are only three slots left and two other buyers are on the phone, you stop asking whether the deal is right. You start asking whether you'll get in.

GrantHmm. And asking for paperwork feels rude, right?

DerekExactly. Asking for paperwork on a spot that's supposedly vanishing is like inspecting the cake while everyone else is already eating.

GrantSo the person with the flashlight at the party is uninvited.

DerekRight. Verification takes time, and rare access has a clock on it, or at least feels like it does.

GrantOkay. But smart people know that. Why doesn't knowing it help?

DerekBecause it flatters you. Nobodys pitching a dull fund to a dull crowd. Its a door that only opens for people who get it. Skipping the homework starts to feel like confidence.

GrantSo when do you actually ask?

DerekBefore youve said yes in your head. Once youve pictured yourself owning a piece, every question starts to feel like an accusation.

GrantHmm. So you ask while the door is still just a door.

DerekSmart rooms, big logos, a little rush, and the question nobody wanted to ask sits there unasked. It's the pattern this show keeps finding in a new outfit.

GrantAnd to be fair, Franco and Dinelli are charged, not convicted. That's for a court to decide.

DerekRight. What we can say is how the pitch is built to feel, and that's useful no matter how the case ends.

GrantWhich is about all the time we've got. Go on then, Derek. Hit the sign-off, and I'll keep my flashlight handy.

DerekOkay. Before we go, Grant, you get one sentence. Make it count.

GrantAsk who actually holds the shares, and get that answer in writing before a single dollar moves.

DerekOne sentence. Bold of you to say with a straight face since I know you had three more.

GrantI had a whole second paragraph about titles and custodians.

DerekSave it for the next episode.

GrantDeal.

DerekAnd if you remember our Linqto episode, same velvet rope, different trick.

GrantSame rope, yeah.

DerekSo here's your homework. Think of the friend who forwards every glossy pitch deck with three rocket emojis. Tell them about this episode, and maybe ask them, "Who holds the shares?"

GrantThen subscribe so you're not the last to hear the next one.

DerekAnd leave us a review. It helps other people find the show, and it makes Grant feel like his flashlight is working.

GrantThanks for listening, everybody. Stay skeptical out there.

DerekThis was Vaporware. Go check something.