Adviser Overcharges Clients
<p>Investment advisers registered with either the Commission or a state agency have a special relation with their clients. This is illustrated by the fact that under the federal securities laws they have not just a close relation but more – there is a fiduciary duty that runs between the adviser and the client. A fiduciary duty is the highest recognized under the securities law between a market professional and the client. It compels not just honesty and fair dealing but more. In sum, it imposes a special relation and duty between the adviser and client. The same kind of duty typically is imposed on advisers under state securities law. A failure to act in accord with that duty constitutes a serious breach of duty as illustrated by the Commission’s most recent case on this issue, SEC v. Nagler, Civil Action No. 25-cv-516 (D. N.M. Filed June 2, 2025). </p>
<p>Named as defendants in this action are: David A. Nagler and New Line Capital, Inc. Mr. Nagler is a resident of Sante Fe, New Mexico. He is registered with the state where he resides as an investment adviser representative. He is also registered with the state of Colorado and during the period of this case, the state of California until about December 2020. He is, in addition, the founder, sole owner and managing member of New Line. The company was founded in 2006 and withdrew its registration in August 2014. During the period of this action the firm was registered with the states of New Mexico, Colorado and New Jersey. </p>
<p>This matter focuses on the period April 2019 through the end of December 2024. During that period Defendants are alleged to have charged clients fees in excess of what they represented and promised. Two points are key. </p>
<p>First, Defendants are alleged by the complaint to have breached their fiduciary duties to New Line clients by making false statements and omitting material facts regarding the annual advisory fees charged to clients. Defendants claimed that they took care to cap their annual fees at 2%. The representation was incorrect. To the contrary, fees in excess of 2% were charged during the period. Defendants also did not disclose that they charged fees over 2%.</p>
<p>Second, Defendants breached their duty when billing clients for services by failing to provide notice that they were charging time charges prior to imposing them. Defendants failed to reveal that they may impose fees without notice. Nevertheless, during the period clients were billed and paid New Line and Mr. Nagler for about $325,000 in hourly fees. The complaint alleges violations of Advisers Act Sections 206(1) and 206(2). See Lit Rel. No. 26319 (June 4, 2025). </p>
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Adviser Overcharges Clients
<p>Investment advisers registered with either the Commission or a state agency have a special relation with their clients. This is illustrated by the fact that under the federal securities laws they have not just a close relation but more – there is a fiduciary duty that runs between the adviser and the client. A fiduciary duty is the highest recognized under the securities law between a market professional and the client. It compels not just honesty and fair dealing but more. In sum, it imposes a special relation and duty between the adviser and client. The same kind of duty typically is imposed on advisers under state securities law. A failure to act in accord with that duty constitutes a serious breach of duty as illustrated by the Commission’s most recent case on this issue, SEC v. Nagler, Civil Action No. 25-cv-516 (D. N.M. Filed June 2, 2025). </p>
<p>Named as defendants in this action are: David A. Nagler and New Line Capital, Inc. Mr. Nagler is a resident of Sante Fe, New Mexico. He is registered with the state where he resides as an investment adviser representative. He is also registered with the state of Colorado and during the period of this case, the state of California until about December 2020. He is, in addition, the founder, sole owner and managing member of New Line. The company was founded in 2006 and withdrew its registration in August 2014. During the period of this action the firm was registered with the states of New Mexico, Colorado and New Jersey. </p>
<p>This matter focuses on the period April 2019 through the end of December 2024. During that period Defendants are alleged to have charged clients fees in excess of what they represented and promised. Two points are key. </p>
<p>First, Defendants are alleged by the complaint to have breached their fiduciary duties to New Line clients by making false statements and omitting material facts regarding the annual advisory fees charged to clients. Defendants claimed that they took care to cap their annual fees at 2%. The representation was incorrect. To the contrary, fees in excess of 2% were charged during the period. Defendants also did not disclose that they charged fees over 2%.</p>
<p>Second, Defendants breached their duty when billing clients for services by failing to provide notice that they were charging time charges prior to imposing them. Defendants failed to reveal that they may impose fees without notice. Nevertheless, during the period clients were billed and paid New Line and Mr. Nagler for about $325,000 in hourly fees. The complaint alleges violations of Advisers Act Sections 206(1) and 206(2). See Lit Rel. No. 26319 (June 4, 2025). </p>
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