'I thought I had $300,000 in SpaceX shares' — the lesson for Canadians chasing pre-IPO stock

According to the Journal’s investigation, Late Stage Capital didn’t hold a direct stake in SpaceX at all. Its access ran through a Bahamas-based firm, Capital Truth, which owned only a portion of another SPV that held SpaceX shares — one extra layer of separation between Rupireddy’s money and the actual stock. As Jared Fine, a partner at the law firm Davis Polk, told the outlet, deals like this ultimately come down to trust: whether investors can rely on a middleman they’ve never met to honour a stake they can’t independently verify.

The Canadian angle: SPVs face the same rules here

Canadians aren’t immune from this kind of structure or this kind of risk. In Canada, any SPV offering securities to the public falls under the same prospectus requirements as any other investment. Retail access to a private deal like this generally requires an exemption — most commonly the accredited investor exemption under National Instrument 45-106, which is set and enforced by the Canadian Securities Administrators (CSA), the umbrella council of Canada’s provincial and territorial securities regulators, including the Ontario Securities Commission (OSC). Firms that sell securities without registering as dealers or advisers with a provincial regulator are operating outside the law, regardless of how legitimate their marketing looks.

The CSA has been increasingly active on this front. Between June and November 2025 alone, Canadian regulators deactivated more than 3,900 fraudulent investment websites and crypto scam platforms. Before wiring money to any firm offering pre-IPO access, Canadians can check whether that firm is registered using the CSA’s National Registration Search.

It’s also worth understanding what protection actually exists — and what doesn’t. The Canadian Investor Protection Fund (CIPF) covers missing property held by a Canadian Investment Regulatory Organization (CIRO) member firm that becomes insolvent, within set limits. It does not cover a scenario like Rupireddy’s, where an unregistered SPV allegedly sold an investor’s stake without telling him. That kind of loss falls outside CIPF’s mandate entirely, which is exactly why sticking to registered, CIRO-regulated dealers matters so much more with private, hard-to-verify investments.

You no longer need a middleman to own SpaceX

Here’s the twist that changes the calculation for anyone still tempted by an SPV: SpaceX completed its initial public offering on June 12, 2026, pricing shares at US$135 (~C$188) and listing on Nasdaq under the ticker SPCX. Once a company is public, the entire reason to go through an opaque SPV disappears.

Canadian investors can now buy SPCX directly through any brokerage that offers access to U.S.-listed stocks. Buying through a CIRO-regulated Canadian brokerage means the shares are held in your name (or in street name at a regulated custodian), the position shows up on your statements and the dealer itself is a CIPF member — a meaningfully different arrangement than trusting an unregistered SPV with your money for years and hoping it delivers.

That doesn’t make SPCX a safe bet on its own. It’s a single, newly listed stock that has already shown significant volatility, and some analysts, including Morningstar’s Nicholas Owens and Suryansh Sharma, have called the post-IPO valuation overblown. Canadians who want exposure to the space economy without betting on one company can also look at diversified ETFs that hold a basket of space and satellite stocks.

The tax bill Canadians need to plan for

Anyone holding U.S. stock, including SPCX, outside a registered account should plan for the Canadian tax treatment, which is different from what a U.S. investor like Rupireddy faces. Capital gains on the sale of U.S. shares are taxable in Canada at the standard 50% inclusion rate — meaning half of the gain, converted to Canadian dollars at the exchange rate on the transaction date, gets added to taxable income.

Canadians also need to watch the reporting threshold: if the total cost of foreign property, including U.S. stocks held outside a registered account, exceeds C$100,000 at any point in the year, the Canada Revenue Agency requires a T1135 foreign income verification form. And U.S. dividends paid on shares held outside a registered retirement account are generally subject to a 15% U.S. withholding tax under the Canada-U.S. tax treaty, though that withholding doesn’t apply to shares held inside an RRSP.

SPVs aren’t only a SpaceX problem

The murkiness around SPV access isn’t limited to SpaceX. Anthropic, the AI company, has published an official warning that it does not permit SPVs to acquire its stock and that any transfer of its shares into an SPV is void under its own transfer restrictions. OpenAI has issued a similar warning, telling investors to be careful of any firm claiming to offer SPV-based exposure to its private equity, since such transfers may violate the company’s restrictions and could be invalidated.

For anyone still tempted by an SPV pitch for the next hot private company, FOMO shouldn’t outweigh the risk. And with SpaceX now trading in the open on Nasdaq, that particular temptation is, at least for this one company, no longer necessary.

Lessons for Canadian investors

• Check registration first — use the CSA’s National Registration Search before sending money to any firm offering pre-IPO or private-market access
• Understand what you actually own — an SPV stake is not the same as owning shares directly, and it’s up to the SPV to deliver on its promise
• Know your protection — CIPF covers missing property at an insolvent CIRO member firm, not losses from an unregistered SPV
• Once a company goes public, skip the middleman — buy the listed stock directly through a regulated Canadian brokerage instead
• Plan for the tax bill — track the 50% capital gains inclusion rate, currency conversion and the C$100,000 T1135 foreign property threshold
• If something feels off, report it — contact your provincial securities regulator or the Canadian Anti-Fraud Centre