The Wall Street Journal reported recently on a fund that touted exposure to SpaceX but later told investors the shares were sold before its IPO. The SEC is now pressing investment firms to prove they actually have access to shares in hot startups like SpaceX, amid concerns that some funds may be overstating their holdings. Regulators want documentation showing legitimate ownership or contractual rights to pre-IPO shares, not just marketing claims.

This follows growing scrutiny of private market investments where valuations can be inflated and transparency limited. The WSJ highlighted the case as an example of how investor trust can be eroded when funds misrepresent access to high-profile companies. Industry experts say the SEC's move could lead to stricter reporting standards for venture and private equity funds.

Firms may now need to provide audit trails, custody records, or transfer agreements to verify their claims. The push reflects broader efforts to increase accountability in alternative investments, especially as retail investors gain more access through secondary markets and specialized funds.