SEC takes action against New Line Capital and its founder David Nagler
The Securities and Exchange Commission (SEC) has filed a lawsuit against David Nagler and New Line Capital, LLC.
According to the complaint, submitted on June 2, 2025 at the New Mexico District Court, Nagler and New Line, an entity he founded, owns, and controls, are investment advisers to New Line’s clients. As investment advisers, Nagler and New Line owe fiduciary duties to New Line’s investment advisory clients and are obligated to act in the clients’ best interests, to employ reasonable care to avoid misleading clients, and to fully disclose all material facts, including any conflicts of interest.
During the time period from at least April 5, 2019 through December 2024 (the “Relevant Period”), the defendants charged advisory fees in excess of what they promised to New Line clients and charged certain clients for “consulting”without their knowledge or consent. In doing so, the defendants breached their fiduciary duties and defrauded New Line clients.
New Line and Nagler defrauded New Line investment advisory clients in connection with two types of fees New Line charged clients: 1) annual advisory fees; and 2) hourly fees for services.
The SEC alleges that, by their actions, the defendants violated, and unless restrained and enjoined will continue to violate, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]. The Commission requests that the Court enter permanent injunctions prohibiting Nagler and New Line from further violations of these provisions and enter permanent injunctions prohibiting Nagler and New Line from receiving compensation from an advisory client unless they provide the client a quarterly written invoice itemizing the fees and charges levied on the client.
Additionally, the Commission requests that the Court order Nagler and New Line, jointly and severally, to disgorge ill-gotten gains, with prejudgment interest, that they received as a result of the conduct alleged in the Complaint and order Nagler and New Line to each pay civil penalties.
