David A. Nagler and New Line Capital, LLC

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26319 / June 4, 2025

Securities and Exchange Commission v. New Line Capital, LLC, et al., Case No. 1:25-cv-00516 (D.N.M. filed June 2, 2025)

SEC Charges New Mexico Investment Adviser Firm and Owner With False And Misleading Statements And Failing To Disclose Conflicts Of Interest

On June 2, 2025, the Securities and Exchange Commission charged New Mexico investment advisory firm New Line Capital, LLC and its owner and managing member David A. Nagler for breaching their fiduciary duties and defrauding their advisory clients by making false and misleading fee disclosures and failing to disclose related conflicts of interest.

According to the SEC’s complaint, New Line and Nagler falsely disclosed that they would “take care to assure” that New Line’s annual advisory fees would not exceed 2% of a client’s assets under management when, in fact, they did not take steps to limit advisory fees to 2% and charged numerous advisory clients more than 2%. The complaint further alleges that New Line and Nagler misleadingly disclosed that New Line “may” offer hourly fee services when, in fact, New Line was providing such services without informing clients about those charges and without disclosing the financial conflicts of interest arising from their charging of hourly fees.

The SEC’s complaint, filed in the U.S. District Court for the District of New Mexico, charges New Line and Nagler with violating the anti-fraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains with pre-judgment interest, and civil penalties from both defendants.

The SEC’s investigation was conducted by Jason Spitalnick and Rachel Yeates, and supervised by Marc Ricchiute and Nicholas Heinke of the SEC’s Denver Regional Office. The litigation will be handled by Ms. Yeates and Zachary Carlyle and supervised by Gregory Kasper and Mr. Heinke, all also of the SEC’s Denver Regional Office.