SEC v. DAVID A. NAGLER; and NEW LINE CAPITAL, LLC, No. 1:25-cv-00516, District of New Mexico (June 4, 2025) — Complaint

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO

SECURITIES AND EXCHANGE COMMISSION,
     Plaintiff,
v.
DAVID A. NAGLER, and
NEW LINE CAPITAL, LLC,

     Defendants.

 Case No. 25-cv-516

COMPLAINT AND JURY DEMAND
Plaintiff Securities and Exchange Commission (“Plaintiff” or “Commission”) alleges the
following against Defendants David A. Nagler (“Nagler”) and New Line Capital, LLC (“New
Line” and, together with Nagler, “Defendants”):
INTRODUCTION
1. Nagler and New Line, an entity he founded, owns, and controls, are investment
advisers to New Line’s clients. As investment advisers, Defendants 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”), Defendants charged advisory fees in
excess of what they promised to New Line clients and charged certain clients for “consulting”

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without their knowledge or consent. In doing so, Defendants breached their fiduciary duties and
defrauded New Line clients.
2. 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.
3. First, Defendants breached their fiduciary duties to New Line clients by making
false and misleading statements and by failing to disclose material facts regarding annual
advisory fees that New Line charged clients. Defendants misrepresented that they “take care to
assure” that New Line’s advisory fees are capped at 2% annually when, in fact, Defendants
charged numerous clients more than 2% per year and did not make any efforts to prevent over-
charging clients. Further, Defendants failed to disclose that Nagler used subjective criteria, such
as how “demanding” he found a client, to determine the amount of advisory fees charged, and
failed to disclose that New Line may charge clients more than 2%. During the Relevant Period,
New Line’s clients paid, and New Line and Nagler received, approximately $125,000 in advisory
fees beyond the 2% annual limit disclosed to New Line clients.
4. Second, Defendants breached their fiduciary duties in connection with their
practice of billing New Line clients hourly fees for services without notice to clients that they
were purportedly providing specific services. Defendants did not disclose to New Line clients
that hourly fees may be charged without notice or the material conflicts of interest that resulted
from this practice. During the Relevant Period, New Line’s clients paid, and New Line and
Nagler received, approximately $325,000 in hourly fees.

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5. By their actions, 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
pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)] and order Nagler and New
Line to each pay civil penalties pursuant to Section 209(e) of the Advisers Act [15 U.S.C. § 80b-
9(e)].
JURISDICTION AND VENUE
6. The Court has jurisdiction over this action pursuant to Sections 209(d) and 214(a)
of the Advisers Act, 15 U.S.C. §§ 80b-9(d) & 80b-14(a).
7. Venue is proper in the District of New Mexico under Section 214 of the Advisers
Act [15 U.S.C. § 80b-14] because New Line’s principal place of business is in Santa Fe, New
Mexico, and Nagler resides in this district. In addition, many of the acts and transactions
constituting the violations alleged occurred in this district, including Nagler and New Line
breaching their fiduciary duties while acting as investment advisers to New Mexico residents.

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8. Defendants have made use of the means or instrumentalities of interstate
commerce or of the mails in connection with the transactions, acts, practices, and courses of
business alleged in this Complaint. This includes Nagler, acting on behalf of New Line,
communicating with New Line clients about advisory services by, among other methods,
telephone and email.
9. Each Defendant entered into four agreements tolling the running of any statute of
limitations from April 5, 2024, to June 7, 2025.
DEFENDANTS
10. David A. Nagler, age 63, is a resident of Sante Fe, New Mexico. Throughout the
Relevant Period Nagler was, and currently is, registered with the state of New Mexico as an
investment adviser representative. Nagler was also registered with the state of Colorado as an
investment adviser representative throughout the Relevant Period and with the state of California
from the beginning of the Relevant Period to approximately December 2020. Nagler is the
founder, sole owner, sole Managing Member, and Chief Compliance Officer of New Line, as
well as an investment adviser representative of New Line.
11. New Line Capital, LLC is a Wyoming limited liability company formed in 2006
with its principal place of business in Sante Fe, New Mexico, which is owned and controlled by
Nagler. New Line registered with the Commission as an investment adviser in 2006 and
withdrew its registration in August 2014. Throughout the Relevant Period,  New Line was, and
currently is, registered as an investment adviser with the states of New Mexico, Colorado, and
New Jersey. New Line was also registered as an investment adviser with the state of California

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from the beginning of the Relevant Period to approximately December 2020 and has been
registered with the state of Connecticut from approximately January 2021 to the present. New
Line is in the business of providing investment advice concerning securities for compensation,
and, as of March 2025, had assets under management of over $29 million.
FACTS
I. Defendants Are Investment Advisers and Owe Fiduciary Duties to New Line
Clients.
A. Nagler and New Line Acted as Investment Advisers to New Line Clients.

12. Throughout the Relevant Period, Nagler and New Line provided investment
advisory services to a variety of New Line clients, including retirees and elderly persons who
rely on their New Line advisory accounts for income. These advisory services include both
investment advice and management of clients’ investment portfolios. New Line provides
advisory services through Nagler and two other investment adviser representatives.
13. In exchange for these advisory services, New Line clients pay advisory fees to
New Line, which Nagler receives as the firm’s owner.
14. During the Relevant Period, New Line was an investment adviser within the
meaning of Section 202(a)(11) of the Advisers Act, 15 U.S.C. § 80b-2(a)(11). New Line is a
state-registered investment adviser that, as stated in its own public disclosures during the
Relevant Period, provided “investment advisory services” to individuals and entities about
investing in securities for compensation in the form of fees. New Line acted as an investment
adviser to its clients.

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15. Nagler, during the Relevant Period, was also an investment adviser within the
meaning of Section 202(a)(11) of the Advisers Act, 15 U.S.C. § 80b-2(a)(11), and acted as an
investment adviser to New Line’s clients. Nagler owned, managed, and controlled New Line,
formed advisory relationships with New Line’s clients, and provided those clients with securities
investment advice and securities investment services in exchange for compensation in the form
of fees paid to New Line, which Nagler received as New Line’s owner.
B. Nagler and New Line Owed the New Line Clients Fiduciary Duties, Which
They Acknowledged in Filings and Internal Documents.

16. As investment advisers, both Nagler and New Line are fiduciaries for New Line’s
advisory clients. As fiduciaries to New Line’s clients, among other obligations, Nagler and New
Line: a) owe New Line’s advisory clients an affirmative duty of utmost good faith; b) are
obligated to provide full and fair disclosure of all material facts; c) have an affirmative obligation
to employ reasonable care to avoid misleading New Line’s clients; and d) have a duty to act in
New Line’s clients’ best interests. Defendants’ duty to disclose all material facts includes a duty
to tell New Line’s clients about all of their actual or potential conflicts of interest that might
incline Defendants to render investment advice that is not disinterested.
17. Nagler and New Line acknowledged their fiduciary duties in numerous filings and
in New Line’s own internal guidance.
18. As a state-registered investment adviser, New Line is  required to file and update,
at least annually, a uniform registration application and report referred to as a Form ADV. As part
of the Form ADV, New Line is required to create and file, on an annual basis, a Form ADV Part

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2A, commonly referred to as a brochure (“Brochure”), containing certain disclosures about its
advisory business.
19. Nagler and New Line acknowledged their fiduciary duties in each of the
Brochures New Line filed during the Relevant Period. In the Brochures, Defendants disclosed to
New Line’s clients that “[w]e have a duty to you to exercise our authority and responsibility for
your benefit, to place your interests first, and to refrain from having outside interests that conflict
with your interests” and “[w]e must avoid any circumstances that might adversely affect or
appear to affect our duty of complete loyalty to you.”
20. Nagler signed each New Line Form ADV in effect from January 2019 through the
time of the filing of this Complaint and certified under penalty of perjury that the information
and statements made in each Form ADV, including exhibits and other information submitted,
which includes the Brochures, were true and correct and did not omit required information.
21. Nagler and New Line also consistently acknowledged their fiduciary obligations
to New Line’s advisory clients in New Line’s Investment Adviser Compliance and Supervisory
Procedures Manual (“Compliance Manual”), which was in effect during the Relevant Period.
The Compliance Manual confirms that:
NLC [New Line Capital] and any supervised persons are prohibited from
engaging in fraudulent, deceptive, or manipulative conduct. Compliance
with this section involves more than acting with honesty and good faith
alone. It means that NLC and its supervised persons have an affirmative
duty of utmost good faith to act solely in the best interests of its clients.

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22. The Compliance Manual further provides: “NLC and its supervised persons must
provide advice that is in the client’s best interest [and] must not place their interests ahead of the
client’s interests under any circumstances.”
23. The Compliance Manual further states that: “Both the [Brochure] and NLC’s
[Advisory Agreement] must include language in which NLC details all material facts regarding
NLC, the advisory services rendered, compensation and conflicts of interest.”
24. Additionally, the Compliance Manual provides: “Generally, NLC must disclose
any potential or actual conflicts of interest when dealing with clients.”
25. According to the Compliance Manual, it was Nagler’s responsibility, as New
Line’s Chief Compliance Officer, “to ensure that all clients are provided with [New Line’s
Brochure and Advisory Agreement] and that they contain the proper disclosure language.”
II. Defendants’ Billing Practices Violated Their Fiduciary Duties in Multiple Ways.
A. Defendants Misled New Line Advisory Clients Regarding, and Failed to Disclose
Adequately, New Line’s Advisory Fees.

26. As fiduciaries, Defendants are obligated to provide full and fair disclosure of all
material facts and have an affirmative obligation to employ reasonable care to avoid misleading
New Line’s clients. In violation of these fiduciary duties, Nagler and New Line a) made false and
misleading statements about New Line’s advisory fee billing practices, and b) failed to disclose
all material facts regarding those practices. As a result, Defendants breached their fiduciary
duties to New Line’s clients.

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Disclosures in the Brochure Regarding Advisory Fees Misled New Line Advisory
Clients.
27. During the Relevant Period, each advisory client entered into an investment
advisory agreement (“Advisory Agreement”) with New Line, signed by Nagler as New Line’s
manager. The Advisory Agreements provide that New Line is entitled to an annual fee for
services rendered, paid quarterly in advance, based on the value of the client’s assets under
management (“Advisory Fees”).
28. An “Investment Advisory Fee Schedule (Schedule B)” was appended to each
Advisory Agreement. Schedule B includes a table with the following percentage-based fees:
Financial Assets Under Management Client’s Annual Management Fee
Up to $500,000 1.50%
$500,001 up to $1,000,000 1.25%
Over $1,000,000 1.00%

Schedule B further provides: “Client acknowledges that it is understood and agreed that the
account is subject to a minimum annual fee of $10,000[.]”
29. During the Relevant Period, Nagler and New Line prepared, made available to
New Line advisory clients, and filed Forms ADV that included Brochures—including, at least,
Brochures dated March 2019, March 2020, March 2021, March 2022, and March 2023—that
reiterated the fee schedule reflected in Schedule B of the Advisory Agreement.
30. The Brochures contain the following disclosure:
Fees quoted are annual and charged quarterly in advance, although with
the client and the adviser’s consent, fees may be charged in arrears. We
also typically charge a minimum annual fee of $10,000, though this

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minimum may also be negotiable at our discretion. At inception, an initial
partial calendar quarter and the next full calendar quarter fees may be
charged. After the first full quarter’s fees are paid, subsequent quarterly
fees may reflect a proportional amount of the $10,000 minimum annual
fee. Regarding our minimum fee, we take care to assure that our
standard advisory fee does not compute to be greater than 2% per
annum.

(Emphasis added.)
31. A reasonable advisory client would have understood from the statement above
(the “Advisory Fee Cap Statement”) that, regardless of the value of the client’s assets under
management and the $10,000 minimum annual fee disclosed in the Advisory Agreement and
Brochures, the Advisory Fees New Line charged the client each year would be no more than 2%
of the value of the client’s assets under management by New Line (the “Advisory Fee Cap”) and
that New Line would make efforts to prevent charging more than that amount. For example, if
the value of the client’s assets under management by New Line was $100,000, so that charging
the $10,000 minimum annual fee would be 10% per year, Defendants would charge no more than
2% of the client’s assets under management, which would be no more than $2,000.
32. The Advisory Fee Cap Statement was false and misleading. From at least April 5,
2019 through February 2024, contrary to the Advisory Fee Cap Statement, New Line, acting
through Nagler, disregarded the Advisory Fee Cap and charged certain clients Advisory Fees in
excess of 2% per year. In addition, contrary to the Advisory Fee Cap Statement, Nagler and New
Line did not make efforts to prevent charging clients Advisory Fees totaling more than 2% per
year. During the Relevant Period, Nagler and New Line did not maintain an internal database,
spreadsheets, or other internal electronic records to track the percentage of Advisory Fees New

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Line charged clients on a yearly basis and did not undertake to assess whether the Advisory Fees
they charged New Line clients exceeded 2% per year.
33. During the Relevant Period, New Line charged clients approximately $125,000 in
Advisory Fees in excess of the Advisory Fee Cap disclosed in the Advisory Fee Cap Statement.
34. Nagler, as owner, Managing Member, and Chief Compliance Officer of New
Line, was solely responsible for determining the amounts of Advisory Fees charged to New Line
clients.
35.  Throughout the Relevant Period, Nagler was also primarily responsible for
supplying the information provided to New Line clients regarding the amount of fees charged to
their accounts. Nagler and New Line did not issue invoices to clients for Advisory Fees during
the Relevant Period. The broker that New Line used to provide trade execution and clearing
services for its clients (“Custodial Broker”) prepared monthly statements for New Line’s
advisory clients (“Monthly Broker Statements”) that include a “Fees” section that specified the
date, description, and total amount of the fees charged by New Line during the month. For New
Line’s clients, the description in the Monthly Broker Statements generally stated: “FA Fee:
Manual.” Nagler manually input in the Custodial Broker’s online portal an aggregate fee amount
that did not itemize or otherwise distinguish between the types of fees Defendants charged. As a
result, the Monthly Broker Statements did not disclose the amount of Advisory Fees, as opposed
to any other fees, New Line clients were charged in a given month.

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Defendants Failed to Disclose All Material Facts Regarding the Advisory Fees.
36. New Line’s disclosures regarding advisory fees were insufficient, did not provide
all material facts regarding advisory fees, and failed to provide clients full and fair disclosure of
all material facts necessary to make an informed decision with respect to their investment with
New Line. As a result, Nagler and New Line breached their fiduciary duties to New Line clients.
37. Throughout the Relevant Period, Nagler determined the amount of Advisory Fees
for many New Line clients by applying subjective factors, including how “demanding” a client
had been during the applicable period, rather than limiting the amount of Advisory Fees charged
to the Advisory Fee Cap.
38. Nagler and New Line failed to disclose to New Line clients that they may use
subjective factors to determine the amount of Advisory Fees charged to their accounts.
Additionally, Nagler and New Line failed to disclose that, contrary to the Advisory Fee Cap
Statement, advisory clients may be charged more than 2% of the funds being managed by Nagler
and New Line.
39. These disclosure failures were omissions of material fact that Nagler and New
Line had a fiduciary duty to disclose to New Line advisory clients.
In Breaching These Fiduciary Duties, Defendants Acted with Scienter and Were
Negligent; the False and Misleading Advisory Fee Cap Statement and the
Undisclosed Facts Regarding the Advisory Fees Were Material.
40. Nagler knew or was reckless in not knowing, and should have known, that the
Advisory Fee Cap Statement was false and misleading. Nagler was solely responsible for
determining the amount of Advisory Fees charged to New Line client accounts and therefore

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knew or was reckless in not knowing, and should have known, the amount of Advisory Fees
charged to New Line client accounts, including fees greater than the Advisory Fee Cap, and that
he and New Line did not make efforts to comply with the Advisory Fee Cap. Further, Nagler
knew that he manually entered monthly fees into the Custodial Broker’s online portal in the
manner described above and that he and New Line did not provide monthly statements or any
other documents to advisory clients that fully and fairly disclosed the amount of Advisory Fees
that New Line actually charged to client accounts or that New Line was charging fees in excess
of the Advisory Fee Cap.
41. Nagler knew or was reckless in not knowing, and should have known, that he and
New Line failed to disclose to clients that Nagler used subjective factors in determining the
amount of fees charged to client accounts or that New Line may charge Advisory Fees of more
than 2% per year.
42. Defendants’ false and misleading statements and omissions were material to
advisory clients because, among other things, a reasonable advisory client would consider the
maximum annual percentage fee to be charged to their account and any subjective or
discretionary factors used to calculate their fees when deciding whether to use the investment
advisory services of Defendants. Nagler knew or was reckless in not knowing, and should have
known, that these false and misleading statements and omissions were material.
43. Nagler knew or was reckless in not knowing that he and New Line have a duty
not to make false or misleading disclosures and are obligated to provide full and fair disclosure
of all material facts and employ reasonable care to avoid misleading New Line’s clients.

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44. In making these false and misleading disclosures and failing to provide full and
fair disclosure of all material facts, Nagler was also negligent. Nagler failed to use ordinary care
under the circumstances by failing to exercise the care that a reasonable investment adviser
would use in making disclosures to their clients.
45. Nagler engaged in this conduct while acting as the sole owner, Managing
Member, and Chief Compliance Officer of New Line and his conduct, knowledge, recklessness,
and negligence may be imputed to New Line.
B. Defendants Failed to Disclose Adequately Hourly Fees and the Resulting
Material Conflicts of Interest.

46. As fiduciaries, Defendants are obligated to provide full and fair disclosure of all
material facts and have an affirmative obligation to employ reasonable care to avoid misleading
New Line’s clients. Defendants’ duties to disclose all material facts include duties to tell New
Line’s clients about all of their actual or potential conflicts of interest that might incline
Defendants to render investment advice that is not disinterested. In violation of these duties,
Nagler and New Line a) failed to provide all material facts regarding consulting service fees
New Line charged clients on an hourly basis (“Hourly Fees”), and b) failed to provide all
material facts regarding the potential and actual material conflicts of interest associated with
Defendants’ receipt of additional compensation for these services. As a result, Defendants
breached their fiduciary duties to New Line’s clients.

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Defendants Failed to Disclose All Material Facts Regarding the Hourly Fees.

47. During the Relevant Period, New Line’s disclosures regarding Hourly Fees were
insufficient, did not provide all material facts regarding the Hourly Fees, and failed to provide
clients with the necessary information to make an informed decision with respect to their
investment with New Line. As a result, Nagler and New Line breached their fiduciary duties to
New Line’s clients.
48. Throughout the Relevant Period, the New Line Brochures incorporated in its
Forms  ADV—including, at least, Brochures dated March 2019, March 2020, March 2021, March
2022, March 2023, March 2024, and March 2025—included the following disclosure:
Services may be offered in connection with advising you on matters not
involving your managed assets or securities. This is not a Financial
Planning service. The charge for this consultation is $250 per hour plus
expenses, if any, with a minimum retainer of six hours per quarter. There
are no Financial Planning agreements. Any consulting service fees are in
addition to any Investment Advisory Management fees.

49. New Line’s March 2019 and March 2020 Brochures included the following
additional language pertaining to Hourly Fees:
If an advisory client of New Line Capital, LLC wishes to make use of the
consulting services of the firm, a specific agreement outlining the hourly
fee and any additional expenses is attached to the client Agreement
Package as Exhibit B-3.

Any consulting service fees are in addition to any Investment Advisory
Management fees.

50. New Line’s Advisory Agreements do not reference Hourly Fees and do not
append separate client agreements related to Hourly Fees or consulting services.

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51. Neither the Advisory Agreements nor any other agreement signed by New Line’s
clients authorize New Line to deduct Hourly Fees from New Line’s clients’ accounts.
52. A reasonable advisory client would understand from the disclosures in the
Brochures that New Line clients would not be charged Hourly Fees unless the clients accepted an
offer from Defendants to provide a specific service in exchange for Hourly Fees.
53. In fact, throughout the Relevant Period, Nagler and New Line billed numerous
clients Hourly Fees without disclosing that they were offering specific services for additional
Hourly Fees and without seeking or acquiring the clients’ agreement to the fees for those specific
services. Multiple New Line clients who were charged Hourly Fees did not know that Nagler and
New Line had ever charged Hourly Fees and, upon learning of the charges, were surprised that
they had been billed such fees. Nagler recorded the Hourly Fees he charged clients in
handwritten notes that typically included the hours charged and a cursory description of the
services purportedly rendered. Several clients were unaware that Nagler had ever performed any
work related to the subjects his notes indicate they were billed for. To the extent clients had a
conversation with Nagler about a topic reflected in his notes or knew that Nagler had performed
a given task, multiple clients understood that he was doing so either as part of New Line’s
investment advisory services or in his capacity as a personal friend or acquaintance. Moreover,
multiple clients were surprised by the amount of time Nagler indicated in his notes that he spent
on particular tasks.

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54. From April 2019 through December 2024, New Line charged dozens of clients
Hourly Fees totaling approximately $325,000, which were deducted from New Line client
accounts.
55. Nagler was solely responsible for providing services on behalf of New Line for
which New Line billed Hourly Fees and for determining the amounts of Hourly Fees New Line
charged to clients.
56. After Nagler purportedly provided services subject to Hourly Fees, Nagler and
New Line did not fully and fairly disclose to clients that Hourly Fees had been charged to their
accounts. Nagler and New Line did not issue invoices to clients for Hourly Fees during the
Relevant Period. Nagler manually entered client fee amounts into the Custodial Broker’s online
portal in a manner that combined Advisory Fees and any Hourly Fees. Accordingly, a client
reviewing a Monthly Broker Statement could not determine whether the listed fee amount
consisted of an Advisory Fee, an Hourly Fee, or a combination of the two.
57. Throughout the Relevant Period, Nagler and New Line failed to disclose to clients
that Hourly Fees may be charged without notice. By omitting that fact, as well as failing to fully
and fairly disclose to clients that Hourly Fees had been charged to their accounts, Defendants did
not provide sufficient information from which clients could understand that they were being
charged Hourly Fees.
58. The omitted information about Hourly Fees w as material to advisory clients
because, among other reasons, a reasonable advisory client would want to know that they might
incur Hourly Fees without notice when deciding whether to use the investment advisory services

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of Defendants and that Hourly Fees were being charged for a specific service before incurring
those fees. Nagler knew or was reckless in not knowing, and should have known, that the
omitted information about Hourly Fees was material.
59. Nagler knew or was reckless in not knowing that he and New Line did not
disclose these material facts to New Line clients and that he and New Line have a duty to
provide full and fair disclosure of all material facts and employ reasonable care to avoid
misleading New Line’s clients.
60. In failing to disclose these material facts, Nagler was also negligent. Nagler failed
to use ordinary care under the circumstances by failing to exercise the care that a reasonable
investment adviser would use in making disclosures to their clients.
61. Nagler engaged in this conduct while acting as the sole owner, Managing
Member, and Chief Compliance Officer of New Line, and his conduct, knowledge, recklessness,
and negligence may be imputed to New Line.
Defendants Failed to Disclose All Material Facts Regarding Conflicts of Interest
Resulting from the Hourly Fees.

62. During the Relevant Period, New Line’s disclosures regarding Hourly Fees also
did not provide all material facts regarding the conflicts of interest resulting from the Hourly Fee
practices. As a result, Nagler and New Line breached their fiduciary duties to New Line clients.
63. As fiduciaries, Defendants were obligated to provide full and fair disclosure of all
material facts including any actual or potential conflicts of interest. To meet this obligation,
Defendants were required to provide New Line advisory clients with sufficient facts so that the

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clients could understand the actual or potential conflicts of interests and thus have a basis on
which to give informed consent to such conflicts or reject them.
64. Defendants’ Hourly Fee practices described above, including Defendants’ practice
of charging Hourly Fees on a discretionary basis without specific notice to affected clients,
created material conflicts of interest between Defendants and New Line clients. As a result of
Defendants’ Hourly Fee practices, their financial interests conflicted with those of New Line’s
clients. Nagler had a financial interest in deciding whether to provide services that incurred
Hourly Fees and an incentive to maximize Hourly Fees charged to advisory clients in order to
increase the fees received. By contrast, each client had an interest in minimizing fees and in
being informed of Nagler’s intent to charge an Hourly Fee for particular services so that the
client could consent to or reject the services and the associated Hourly Fee.
65. Throughout the Relevant Period, Defendants failed to advise New Line clients
that Hourly Fees would be charged without notice and that there was a conflict of interest as a
result of the Hourly Fees. Because of Nagler’s practice of submitting aggregate fee amounts
through the Custodial Broker’s online portal, the Monthly Broker Statements provided to New
Line clients did not disclose or itemize Hourly Fees. As a result, even after Defendants charged
Hourly Fees, Defendants did not provide clients sufficient facts to understand the conflicts of
interest.
66. The undisclosed conflicts of interest arising from Defendants’ Hourly Fee
practices were material because, among other things, a reasonable advisory client would want to
be informed of the conflicts of interest and have an opportunity to give informed consent to the

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conflicts or reject them and would consider the conflicts of interest when deciding whether to
engage (or continue to engage) the investment advisory services of Defendants. Nagler knew or
was reckless in not knowing, and should have known, that these conflicts of interest were
material.
67. Nagler knew or was reckless in not knowing that he and New Line did not
disclose these material conflicts of interest to New Line clients and that he and New Line have
fiduciary duties to New Line clients that include an obligation to make full and fair disclosure of
any material conflicts of interest and sufficient facts to enable clients to understand the conflicts
of interest and make an informed decision to consent to the conflicts or reject them.
68. In failing to disclose these material conflicts of interest, Nagler was also
negligent. Nagler failed to use ordinary care under the circumstances by failing to exercise the
care that a reasonable investment adviser would use in making disclosures to their clients.
69. Nagler engaged in this conduct while acting as the sole owner, Managing
Member, and Chief Compliance Officer of New Line, and his conduct, knowledge, recklessness,
and negligence may be imputed to New Line.
FIRST CLAIM FOR RELIEF
Violations of Section 206(1) of the Advisers Act
(Nagler and New Line)

70. The Commission realleges and incorporates by reference paragraphs 1 through 69
as though fully set forth herein.
71. Nagler and New Line are “investment advisers” as defined by Section 202(a)(11)
of the Advisers Act [15 U.S.C. § 80b-2(a)(11)].

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72. Nagler and New Line, and each of them, while acting as investment advisers,
directly or indirectly, by use of the mails or means and instrumentalities of interstate commerce,
employed one or more devices, schemes, or artifices to defraud clients or prospective clients.
73. By reason of the foregoing, Nagler and New Line violated and, unless enjoined,
will again violate Section 206(1) of the Advisers Act [15 U.S.C. § 80b-6(1)].
SECOND CLAIM FOR RELIEF
Violations of Section 206(2) of the Advisers Act
(Nagler and New Line)

74. The Commission realleges and incorporates by reference paragraphs 1 through 69
as though fully set forth herein.
75. Nagler and New Line are “investment advisers” as defined by Section 202(a)(11)
of the Advisers Act [15 U.S.C. § 80b-2(a)(11)].
76. Nagler and New Line, and each of them, while acting as investment advisers,
directly or indirectly, by use of the mails or means and instrumentalities of interstate commerce
engaged in one or more transactions, practices, or courses of business which operated as a fraud
or deceit upon clients or prospective clients.
77. By reason of the foregoing, Nagler and New Line violated and, unless enjoined,
will again violate Section 206(2) of the Advisers Act [15 U.S.C. § 80b-6(2)].
REQUEST FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
A. Find that Nagler and New Line each committed the violations alleged in this
Complaint;

22

B. Enter injunctions, in a form consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, permanently enjoining Nagler and New Line from violating, directly or
indirectly, Sections 206(1) [15 U.S.C. § 80b-6(1)] and 206(2) [15 U.S.C. § 80b-6(2)] of the
Advisers Act;
C. Enter injunctions, in a form consistent with Rule 65(d) of the Federal Rules of
Civil Procedure, enjoining 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;
D. Order Defendants, jointly and severally, to disgorge all ill-gotten gains received
directly or indirectly, with pre-judgment interest thereon, as a result of the alleged violations,
pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§
78u(d)(3), 78u(d)(5),  and 78u(d)(7)];
E. Order Defendants to pay civil penalties pursuant to Section 209(e) of the Advisers
Act [15 U.S.C. § 80b-6(9)(e)]; and
F. Grant such other and further relief as this Court may deem just and proper.

23

JURY DEMAND
The Commission demands a trial by jury on all claims so triable.

Dated: June 2, 2025
      By: /s/ Zachary T. Carlyle____
       Zachary T. Carlyle
       Rachel E. Yeates
       A
TTORNEYS FOR PLAINTIFF
U
NITED STATES SECURITIES AND
EXCHANGE COMMISSION
1961 Stout St., 17
th
 Floor
Denver, Colorado 80294
Telephone:  303.844.1084 (Carlyle)
303.844.1060 (Yeates)
Email:   [email protected]
[email protected]

1 
 

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF NEW MEXICO 

 
SECURITIES AND EXCHANGE COMMISSION, 

     Plaintiff, 

v. 

DAVID A. NAGLER, and 
NEW LINE CAPITAL, LLC, 
 
     Defendants. 

 

 

 Case No. 25-cv-516 

  

COMPLAINT AND JURY DEMAND 

Plaintiff Securities and Exchange Commission (“Plaintiff” or “Commission”) alleges the 

following against Defendants David A. Nagler (“Nagler”) and New Line Capital, LLC (“New 

Line” and, together with Nagler, “Defendants”): 

INTRODUCTION 

1. Nagler and New Line, an entity he founded, owns, and controls, are investment 

advisers to New Line’s clients. As investment advisers, Defendants 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”), Defendants charged advisory fees in 

excess of what they promised to New Line clients and charged certain clients for “consulting” 

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without their knowledge or consent. In doing so, Defendants breached their fiduciary duties and 

defrauded New Line clients. 

2. 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. 

3. First, Defendants breached their fiduciary duties to New Line clients by making 

false and misleading statements and by failing to disclose material facts regarding annual 

advisory fees that New Line charged clients. Defendants misrepresented that they “take care to 

assure” that New Line’s advisory fees are capped at 2% annually when, in fact, Defendants 

charged numerous clients more than 2% per year and did not make any efforts to prevent over-

charging clients. Further, Defendants failed to disclose that Nagler used subjective criteria, such 

as how “demanding” he found a client, to determine the amount of advisory fees charged, and 

failed to disclose that New Line may charge clients more than 2%. During the Relevant Period, 

New Line’s clients paid, and New Line and Nagler received, approximately $125,000 in advisory 

fees beyond the 2% annual limit disclosed to New Line clients. 

4. Second, Defendants breached their fiduciary duties in connection with their 

practice of billing New Line clients hourly fees for services without notice to clients that they 

were purportedly providing specific services. Defendants did not disclose to New Line clients 

that hourly fees may be charged without notice or the material conflicts of interest that resulted 

from this practice. During the Relevant Period, New Line’s clients paid, and New Line and 

Nagler received, approximately $325,000 in hourly fees. 

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5. By their actions, 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 

pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)] and order Nagler and New 

Line to each pay civil penalties pursuant to Section 209(e) of the Advisers Act [15 U.S.C. § 80b-

9(e)]. 

JURISDICTION AND VENUE 

6. The Court has jurisdiction over this action pursuant to Sections 209(d) and 214(a) 

of the Advisers Act, 15 U.S.C. §§ 80b-9(d) & 80b-14(a). 

7. Venue is proper in the District of New Mexico under Section 214 of the Advisers 

Act [15 U.S.C. § 80b-14] because New Line’s principal place of business is in Santa Fe, New 

Mexico, and Nagler resides in this district. In addition, many of the acts and transactions 

constituting the violations alleged occurred in this district, including Nagler and New Line 

breaching their fiduciary duties while acting as investment advisers to New Mexico residents. 

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8. Defendants have made use of the means or instrumentalities of interstate 

commerce or of the mails in connection with the transactions, acts, practices, and courses of 

business alleged in this Complaint. This includes Nagler, acting on behalf of New Line, 

communicating with New Line clients about advisory services by, among other methods, 

telephone and email. 

9. Each Defendant entered into four agreements tolling the running of any statute of 

limitations from April 5, 2024, to June 7, 2025. 

DEFENDANTS 

10. David A. Nagler, age 63, is a resident of Sante Fe, New Mexico. Throughout the 

Relevant Period Nagler was, and currently is, registered with the state of New Mexico as an 

investment adviser representative. Nagler was also registered with the state of Colorado as an 

investment adviser representative throughout the Relevant Period and with the state of California 

from the beginning of the Relevant Period to approximately December 2020. Nagler is the 

founder, sole owner, sole Managing Member, and Chief Compliance Officer of New Line, as 

well as an investment adviser representative of New Line. 

11. New Line Capital, LLC is a Wyoming limited liability company formed in 2006 

with its principal place of business in Sante Fe, New Mexico, which is owned and controlled by 

Nagler. New Line registered with the Commission as an investment adviser in 2006 and 

withdrew its registration in August 2014. Throughout the Relevant Period, New Line was, and 

currently is, registered as an investment adviser with the states of New Mexico, Colorado, and 

New Jersey. New Line was also registered as an investment adviser with the state of California 

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from the beginning of the Relevant Period to approximately December 2020 and has been 

registered with the state of Connecticut from approximately January 2021 to the present. New 

Line is in the business of providing investment advice concerning securities for compensation, 

and, as of March 2025, had assets under management of over $29 million. 

FACTS 

I. Defendants Are Investment Advisers and Owe Fiduciary Duties to New Line 
Clients. 

A. Nagler and New Line Acted as Investment Advisers to New Line Clients. 
 

12. Throughout the Relevant Period, Nagler and New Line provided investment 

advisory services to a variety of New Line clients, including retirees and elderly persons who 

rely on their New Line advisory accounts for income. These advisory services include both 

investment advice and management of clients’ investment portfolios. New Line provides 

advisory services through Nagler and two other investment adviser representatives. 

13. In exchange for these advisory services, New Line clients pay advisory fees to 

New Line, which Nagler receives as the firm’s owner. 

14. During the Relevant Period, New Line was an investment adviser within the 

meaning of Section 202(a)(11) of the Advisers Act, 15 U.S.C. § 80b-2(a)(11). New Line is a 

state-registered investment adviser that, as stated in its own public disclosures during the 

Relevant Period, provided “investment advisory services” to individuals and entities about 

investing in securities for compensation in the form of fees. New Line acted as an investment 

adviser to its clients.  

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15. Nagler, during the Relevant Period, was also an investment adviser within the 

meaning of Section 202(a)(11) of the Advisers Act, 15 U.S.C. § 80b-2(a)(11), and acted as an 

investment adviser to New Line’s clients. Nagler owned, managed, and controlled New Line, 

formed advisory relationships with New Line’s clients, and provided those clients with securities 

investment advice and securities investment services in exchange for compensation in the form 

of fees paid to New Line, which Nagler received as New Line’s owner.  

B. Nagler and New Line Owed the New Line Clients Fiduciary Duties, Which 
They Acknowledged in Filings and Internal Documents. 
 

16. As investment advisers, both Nagler and New Line are fiduciaries for New Line’s 

advisory clients. As fiduciaries to New Line’s clients, among other obligations, Nagler and New 

Line: a) owe New Line’s advisory clients an affirmative duty of utmost good faith; b) are 

obligated to provide full and fair disclosure of all material facts; c) have an affirmative obligation 

to employ reasonable care to avoid misleading New Line’s clients; and d) have a duty to act in 

New Line’s clients’ best interests. Defendants’ duty to disclose all material facts includes a duty 

to tell New Line’s clients about all of their actual or potential conflicts of interest that might 

incline Defendants to render investment advice that is not disinterested. 

17. Nagler and New Line acknowledged their fiduciary duties in numerous filings and 

in New Line’s own internal guidance. 

18. As a state-registered investment adviser, New Line is required to file and update, 

at least annually, a uniform registration application and report referred to as a Form ADV. As part 

of the Form ADV, New Line is required to create and file, on an annual basis, a Form ADV Part 

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2A, commonly referred to as a brochure (“Brochure”), containing certain disclosures about its 

advisory business. 

19. Nagler and New Line acknowledged their fiduciary duties in each of the 

Brochures New Line filed during the Relevant Period. In the Brochures, Defendants disclosed to 

New Line’s clients that “[w]e have a duty to you to exercise our authority and responsibility for 

your benefit, to place your interests first, and to refrain from having outside interests that conflict 

with your interests” and “[w]e must avoid any circumstances that might adversely affect or 

appear to affect our duty of complete loyalty to you.” 

20. Nagler signed each New Line Form ADV in effect from January 2019 through the 

time of the filing of this Complaint and certified under penalty of perjury that the information 

and statements made in each Form ADV, including exhibits and other information submitted, 

which includes the Brochures, were true and correct and did not omit required information. 

21. Nagler and New Line also consistently acknowledged their fiduciary obligations 

to New Line’s advisory clients in New Line’s Investment Adviser Compliance and Supervisory 

Procedures Manual (“Compliance Manual”), which was in effect during the Relevant Period. 

The Compliance Manual confirms that: 

NLC [New Line Capital] and any supervised persons are prohibited from 
engaging in fraudulent, deceptive, or manipulative conduct. Compliance 
with this section involves more than acting with honesty and good faith 
alone. It means that NLC and its supervised persons have an affirmative 
duty of utmost good faith to act solely in the best interests of its clients. 

 

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22. The Compliance Manual further provides: “NLC and its supervised persons must 

provide advice that is in the client’s best interest [and] must not place their interests ahead of the 

client’s interests under any circumstances.” 

23. The Compliance Manual further states that: “Both the [Brochure] and NLC’s 

[Advisory Agreement] must include language in which NLC details all material facts regarding 

NLC, the advisory services rendered, compensation and conflicts of interest.”  

24. Additionally, the Compliance Manual provides: “Generally, NLC must disclose 

any potential or actual conflicts of interest when dealing with clients.” 

25. According to the Compliance Manual, it was Nagler’s responsibility, as New 

Line’s Chief Compliance Officer, “to ensure that all clients are provided with [New Line’s 

Brochure and Advisory Agreement] and that they contain the proper disclosure language.” 

II. Defendants’ Billing Practices Violated Their Fiduciary Duties in Multiple Ways. 

A. Defendants Misled New Line Advisory Clients Regarding, and Failed to Disclose 
Adequately, New Line’s Advisory Fees. 
 
26. As fiduciaries, Defendants are obligated to provide full and fair disclosure of all 

material facts and have an affirmative obligation to employ reasonable care to avoid misleading 

New Line’s clients. In violation of these fiduciary duties, Nagler and New Line a) made false and 

misleading statements about New Line’s advisory fee billing practices, and b) failed to disclose 

all material facts regarding those practices. As a result, Defendants breached their fiduciary 

duties to New Line’s clients. 

 

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Disclosures in the Brochure Regarding Advisory Fees Misled New Line Advisory 
Clients. 

27. During the Relevant Period, each advisory client entered into an investment 

advisory agreement (“Advisory Agreement”) with New Line, signed by Nagler as New Line’s 

manager. The Advisory Agreements provide that New Line is entitled to an annual fee for 

services rendered, paid quarterly in advance, based on the value of the client’s assets under 

management (“Advisory Fees”). 

28. An “Investment Advisory Fee Schedule (Schedule B)” was appended to each 

Advisory Agreement. Schedule B includes a table with the following percentage-based fees: 

Financial Assets Under Management Client’s Annual Management Fee 

Up to $500,000 1.50% 

$500,001 up to $1,000,000 1.25% 

Over $1,000,000 1.00% 
 
Schedule B further provides: “Client acknowledges that it is understood and agreed that the 

account is subject to a minimum annual fee of $10,000[.]”  

29. During the Relevant Period, Nagler and New Line prepared, made available to 

New Line advisory clients, and filed Forms ADV that included Brochures—including, at least, 

Brochures dated March 2019, March 2020, March 2021, March 2022, and March 2023—that 

reiterated the fee schedule reflected in Schedule B of the Advisory Agreement. 

30. The Brochures contain the following disclosure: 

Fees quoted are annual and charged quarterly in advance, although with 
the client and the adviser’s consent, fees may be charged in arrears. We 
also typically charge a minimum annual fee of $10,000, though this 

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minimum may also be negotiable at our discretion. At inception, an initial 
partial calendar quarter and the next full calendar quarter fees may be 
charged. After the first full quarter’s fees are paid, subsequent quarterly 
fees may reflect a proportional amount of the $10,000 minimum annual 
fee. Regarding our minimum fee, we take care to assure that our 
standard advisory fee does not compute to be greater than 2% per 
annum. 
 

(Emphasis added.) 

31. A reasonable advisory client would have understood from the statement above 

(the “Advisory Fee Cap Statement”) that, regardless of the value of the client’s assets under 

management and the $10,000 minimum annual fee disclosed in the Advisory Agreement and 

Brochures, the Advisory Fees New Line charged the client each year would be no more than 2% 

of the value of the client’s assets under management by New Line (the “Advisory Fee Cap”) and 

that New Line would make efforts to prevent charging more than that amount. For example, if 

the value of the client’s assets under management by New Line was $100,000, so that charging 

the $10,000 minimum annual fee would be 10% per year, Defendants would charge no more than 

2% of the client’s assets under management, which would be no more than $2,000. 

32. The Advisory Fee Cap Statement was false and misleading. From at least April 5, 

2019 through February 2024, contrary to the Advisory Fee Cap Statement, New Line, acting 

through Nagler, disregarded the Advisory Fee Cap and charged certain clients Advisory Fees in 

excess of 2% per year. In addition, contrary to the Advisory Fee Cap Statement, Nagler and New 

Line did not make efforts to prevent charging clients Advisory Fees totaling more than 2% per 

year. During the Relevant Period, Nagler and New Line did not maintain an internal database, 

spreadsheets, or other internal electronic records to track the percentage of Advisory Fees New 

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Line charged clients on a yearly basis and did not undertake to assess whether the Advisory Fees 

they charged New Line clients exceeded 2% per year. 

33. During the Relevant Period, New Line charged clients approximately $125,000 in 

Advisory Fees in excess of the Advisory Fee Cap disclosed in the Advisory Fee Cap Statement. 

34. Nagler, as owner, Managing Member, and Chief Compliance Officer of New 

Line, was solely responsible for determining the amounts of Advisory Fees charged to New Line 

clients. 

35.  Throughout the Relevant Period, Nagler was also primarily responsible for 

supplying the information provided to New Line clients regarding the amount of fees charged to 

their accounts. Nagler and New Line did not issue invoices to clients for Advisory Fees during 

the Relevant Period. The broker that New Line used to provide trade execution and clearing 

services for its clients (“Custodial Broker”) prepared monthly statements for New Line’s 

advisory clients (“Monthly Broker Statements”) that include a “Fees” section that specified the 

date, description, and total amount of the fees charged by New Line during the month. For New 

Line’s clients, the description in the Monthly Broker Statements generally stated: “FA Fee: 

Manual.” Nagler manually input in the Custodial Broker’s online portal an aggregate fee amount 

that did not itemize or otherwise distinguish between the types of fees Defendants charged. As a 

result, the Monthly Broker Statements did not disclose the amount of Advisory Fees, as opposed 

to any other fees, New Line clients were charged in a given month. 

 

  

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Defendants Failed to Disclose All Material Facts Regarding the Advisory Fees. 

36. New Line’s disclosures regarding advisory fees were insufficient, did not provide 

all material facts regarding advisory fees, and failed to provide clients full and fair disclosure of 

all material facts necessary to make an informed decision with respect to their investment with 

New Line. As a result, Nagler and New Line breached their fiduciary duties to New Line clients. 

37. Throughout the Relevant Period, Nagler determined the amount of Advisory Fees 

for many New Line clients by applying subjective factors, including how “demanding” a client 

had been during the applicable period, rather than limiting the amount of Advisory Fees charged 

to the Advisory Fee Cap.  

38. Nagler and New Line failed to disclose to New Line clients that they may use 

subjective factors to determine the amount of Advisory Fees charged to their accounts. 

Additionally, Nagler and New Line failed to disclose that, contrary to the Advisory Fee Cap 

Statement, advisory clients may be charged more than 2% of the funds being managed by Nagler 

and New Line. 

39. These disclosure failures were omissions of material fact that Nagler and New 

Line had a fiduciary duty to disclose to New Line advisory clients. 

In Breaching These Fiduciary Duties, Defendants Acted with Scienter and Were 
Negligent; the False and Misleading Advisory Fee Cap Statement and the 
Undisclosed Facts Regarding the Advisory Fees Were Material.  

40. Nagler knew or was reckless in not knowing, and should have known, that the 

Advisory Fee Cap Statement was false and misleading. Nagler was solely responsible for 

determining the amount of Advisory Fees charged to New Line client accounts and therefore 

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knew or was reckless in not knowing, and should have known, the amount of Advisory Fees 

charged to New Line client accounts, including fees greater than the Advisory Fee Cap, and that 

he and New Line did not make efforts to comply with the Advisory Fee Cap. Further, Nagler 

knew that he manually entered monthly fees into the Custodial Broker’s online portal in the 

manner described above and that he and New Line did not provide monthly statements or any 

other documents to advisory clients that fully and fairly disclosed the amount of Advisory Fees 

that New Line actually charged to client accounts or that New Line was charging fees in excess 

of the Advisory Fee Cap.   

41. Nagler knew or was reckless in not knowing, and should have known, that he and 

New Line failed to disclose to clients that Nagler used subjective factors in determining the 

amount of fees charged to client accounts or that New Line may charge Advisory Fees of more 

than 2% per year.  

42. Defendants’ false and misleading statements and omissions were material to 

advisory clients because, among other things, a reasonable advisory client would consider the 

maximum annual percentage fee to be charged to their account and any subjective or 

discretionary factors used to calculate their fees when deciding whether to use the investment 

advisory services of Defendants. Nagler knew or was reckless in not knowing, and should have 

known, that these false and misleading statements and omissions were material. 

43. Nagler knew or was reckless in not knowing that he and New Line have a duty 

not to make false or misleading disclosures and are obligated to provide full and fair disclosure 

of all material facts and employ reasonable care to avoid misleading New Line’s clients.  

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44. In making these false and misleading disclosures and failing to provide full and 

fair disclosure of all material facts, Nagler was also negligent. Nagler failed to use ordinary care 

under the circumstances by failing to exercise the care that a reasonable investment adviser 

would use in making disclosures to their clients.  

45. Nagler engaged in this conduct while acting as the sole owner, Managing 

Member, and Chief Compliance Officer of New Line and his conduct, knowledge, recklessness, 

and negligence may be imputed to New Line. 

B. Defendants Failed to Disclose Adequately Hourly Fees and the Resulting 
Material Conflicts of Interest.  

 
46. As fiduciaries, Defendants are obligated to provide full and fair disclosure of all 

material facts and have an affirmative obligation to employ reasonable care to avoid misleading 

New Line’s clients. Defendants’ duties to disclose all material facts include duties to tell New 

Line’s clients about all of their actual or potential conflicts of interest that might incline 

Defendants to render investment advice that is not disinterested. In violation of these duties, 

Nagler and New Line a) failed to provide all material facts regarding consulting service fees 

New Line charged clients on an hourly basis (“Hourly Fees”), and b) failed to provide all 

material facts regarding the potential and actual material conflicts of interest associated with 

Defendants’ receipt of additional compensation for these services. As a result, Defendants 

breached their fiduciary duties to New Line’s clients. 

 

 

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Defendants Failed to Disclose All Material Facts Regarding the Hourly Fees. 
 
47. During the Relevant Period, New Line’s disclosures regarding Hourly Fees were 

insufficient, did not provide all material facts regarding the Hourly Fees, and failed to provide 

clients with the necessary information to make an informed decision with respect to their 

investment with New Line. As a result, Nagler and New Line breached their fiduciary duties to 

New Line’s clients. 

48. Throughout the Relevant Period, the New Line Brochures incorporated in its 

Forms ADV—including, at least, Brochures dated March 2019, March 2020, March 2021, March 

2022, March 2023, March 2024, and March 2025—included the following disclosure: 

Services may be offered in connection with advising you on matters not 
involving your managed assets or securities. This is not a Financial 
Planning service. The charge for this consultation is $250 per hour plus 
expenses, if any, with a minimum retainer of six hours per quarter. There 
are no Financial Planning agreements. Any consulting service fees are in 
addition to any Investment Advisory Management fees.  
 

49. New Line’s March 2019 and March 2020 Brochures included the following 

additional language pertaining to Hourly Fees: 

If an advisory client of New Line Capital, LLC wishes to make use of the 
consulting services of the firm, a specific agreement outlining the hourly 
fee and any additional expenses is attached to the client Agreement 
Package as Exhibit B-3. 
 
Any consulting service fees are in addition to any Investment Advisory 
Management fees. 
 

50. New Line’s Advisory Agreements do not reference Hourly Fees and do not 

append separate client agreements related to Hourly Fees or consulting services.  

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51. Neither the Advisory Agreements nor any other agreement signed by New Line’s 

clients authorize New Line to deduct Hourly Fees from New Line’s clients’ accounts.  

52. A reasonable advisory client would understand from the disclosures in the 

Brochures that New Line clients would not be charged Hourly Fees unless the clients accepted an 

offer from Defendants to provide a specific service in exchange for Hourly Fees.  

53. In fact, throughout the Relevant Period, Nagler and New Line billed numerous 

clients Hourly Fees without disclosing that they were offering specific services for additional 

Hourly Fees and without seeking or acquiring the clients’ agreement to the fees for those specific 

services. Multiple New Line clients who were charged Hourly Fees did not know that Nagler and 

New Line had ever charged Hourly Fees and, upon learning of the charges, were surprised that 

they had been billed such fees. Nagler recorded the Hourly Fees he charged clients in 

handwritten notes that typically included the hours charged and a cursory description of the 

services purportedly rendered. Several clients were unaware that Nagler had ever performed any 

work related to the subjects his notes indicate they were billed for. To the extent clients had a 

conversation with Nagler about a topic reflected in his notes or knew that Nagler had performed 

a given task, multiple clients understood that he was doing so either as part of New Line’s 

investment advisory services or in his capacity as a personal friend or acquaintance. Moreover, 

multiple clients were surprised by the amount of time Nagler indicated in his notes that he spent 

on particular tasks. 

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54. From April 2019 through December 2024, New Line charged dozens of clients 

Hourly Fees totaling approximately $325,000, which were deducted from New Line client 

accounts.  

55. Nagler was solely responsible for providing services on behalf of New Line for 

which New Line billed Hourly Fees and for determining the amounts of Hourly Fees New Line 

charged to clients. 

56. After Nagler purportedly provided services subject to Hourly Fees, Nagler and 

New Line did not fully and fairly disclose to clients that Hourly Fees had been charged to their 

accounts. Nagler and New Line did not issue invoices to clients for Hourly Fees during the 

Relevant Period. Nagler manually entered client fee amounts into the Custodial Broker’s online 

portal in a manner that combined Advisory Fees and any Hourly Fees. Accordingly, a client 

reviewing a Monthly Broker Statement could not determine whether the listed fee amount 

consisted of an Advisory Fee, an Hourly Fee, or a combination of the two. 

57. Throughout the Relevant Period, Nagler and New Line failed to disclose to clients 

that Hourly Fees may be charged without notice. By omitting that fact, as well as failing to fully 

and fairly disclose to clients that Hourly Fees had been charged to their accounts, Defendants did 

not provide sufficient information from which clients could understand that they were being 

charged Hourly Fees. 

58. The omitted information about Hourly Fees was material to advisory clients 

because, among other reasons, a reasonable advisory client would want to know that they might 

incur Hourly Fees without notice when deciding whether to use the investment advisory services 

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of Defendants and that Hourly Fees were being charged for a specific service before incurring 

those fees. Nagler knew or was reckless in not knowing, and should have known, that the 

omitted information about Hourly Fees was material. 

59. Nagler knew or was reckless in not knowing that he and New Line did not 

disclose these material facts to New Line clients and that he and New Line have a duty to 

provide full and fair disclosure of all material facts and employ reasonable care to avoid 

misleading New Line’s clients.  

60. In failing to disclose these material facts, Nagler was also negligent. Nagler failed 

to use ordinary care under the circumstances by failing to exercise the care that a reasonable 

investment adviser would use in making disclosures to their clients.  

61. Nagler engaged in this conduct while acting as the sole owner, Managing 

Member, and Chief Compliance Officer of New Line, and his conduct, knowledge, recklessness, 

and negligence may be imputed to New Line. 

Defendants Failed to Disclose All Material Facts Regarding Conflicts of Interest 
Resulting from the Hourly Fees. 

 
62. During the Relevant Period, New Line’s disclosures regarding Hourly Fees also 

did not provide all material facts regarding the conflicts of interest resulting from the Hourly Fee 

practices. As a result, Nagler and New Line breached their fiduciary duties to New Line clients. 

63. As fiduciaries, Defendants were obligated to provide full and fair disclosure of all 

material facts including any actual or potential conflicts of interest. To meet this obligation, 

Defendants were required to provide New Line advisory clients with sufficient facts so that the 

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clients could understand the actual or potential conflicts of interests and thus have a basis on 

which to give informed consent to such conflicts or reject them. 

64. Defendants’ Hourly Fee practices described above, including Defendants’ practice 

of charging Hourly Fees on a discretionary basis without specific notice to affected clients, 

created material conflicts of interest between Defendants and New Line clients. As a result of 

Defendants’ Hourly Fee practices, their financial interests conflicted with those of New Line’s 

clients. Nagler had a financial interest in deciding whether to provide services that incurred 

Hourly Fees and an incentive to maximize Hourly Fees charged to advisory clients in order to 

increase the fees received. By contrast, each client had an interest in minimizing fees and in 

being informed of Nagler’s intent to charge an Hourly Fee for particular services so that the 

client could consent to or reject the services and the associated Hourly Fee. 

65. Throughout the Relevant Period, Defendants failed to advise New Line clients 

that Hourly Fees would be charged without notice and that there was a conflict of interest as a 

result of the Hourly Fees. Because of Nagler’s practice of submitting aggregate fee amounts 

through the Custodial Broker’s online portal, the Monthly Broker Statements provided to New 

Line clients did not disclose or itemize Hourly Fees. As a result, even after Defendants charged 

Hourly Fees, Defendants did not provide clients sufficient facts to understand the conflicts of 

interest. 

66. The undisclosed conflicts of interest arising from Defendants’ Hourly Fee 

practices were material because, among other things, a reasonable advisory client would want to 

be informed of the conflicts of interest and have an opportunity to give informed consent to the 

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conflicts or reject them and would consider the conflicts of interest when deciding whether to 

engage (or continue to engage) the investment advisory services of Defendants. Nagler knew or 

was reckless in not knowing, and should have known, that these conflicts of interest were 

material. 

67. Nagler knew or was reckless in not knowing that he and New Line did not 

disclose these material conflicts of interest to New Line clients and that he and New Line have 

fiduciary duties to New Line clients that include an obligation to make full and fair disclosure of 

any material conflicts of interest and sufficient facts to enable clients to understand the conflicts 

of interest and make an informed decision to consent to the conflicts or reject them.  

68. In failing to disclose these material conflicts of interest, Nagler was also 

negligent. Nagler failed to use ordinary care under the circumstances by failing to exercise the 

care that a reasonable investment adviser would use in making disclosures to their clients.  

69. Nagler engaged in this conduct while acting as the sole owner, Managing 

Member, and Chief Compliance Officer of New Line, and his conduct, knowledge, recklessness, 

and negligence may be imputed to New Line. 

FIRST CLAIM FOR RELIEF 
Violations of Section 206(1) of the Advisers Act 

(Nagler and New Line) 
 

70. The Commission realleges and incorporates by reference paragraphs 1 through 69 

as though fully set forth herein. 

71. Nagler and New Line are “investment advisers” as defined by Section 202(a)(11) 

of the Advisers Act [15 U.S.C. § 80b-2(a)(11)]. 

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72. Nagler and New Line, and each of them, while acting as investment advisers, 

directly or indirectly, by use of the mails or means and instrumentalities of interstate commerce, 

employed one or more devices, schemes, or artifices to defraud clients or prospective clients. 

73. By reason of the foregoing, Nagler and New Line violated and, unless enjoined, 

will again violate Section 206(1) of the Advisers Act [15 U.S.C. § 80b-6(1)]. 

SECOND CLAIM FOR RELIEF 
Violations of Section 206(2) of the Advisers Act 

(Nagler and New Line) 
 

74. The Commission realleges and incorporates by reference paragraphs 1 through 69 

as though fully set forth herein. 

75. Nagler and New Line are “investment advisers” as defined by Section 202(a)(11) 

of the Advisers Act [15 U.S.C. § 80b-2(a)(11)]. 

76. Nagler and New Line, and each of them, while acting as investment advisers, 

directly or indirectly, by use of the mails or means and instrumentalities of interstate commerce 

engaged in one or more transactions, practices, or courses of business which operated as a fraud 

or deceit upon clients or prospective clients. 

77. By reason of the foregoing, Nagler and New Line violated and, unless enjoined, 

will again violate Section 206(2) of the Advisers Act [15 U.S.C. § 80b-6(2)]. 

REQUEST FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court: 

A. Find that Nagler and New Line each committed the violations alleged in this 

Complaint; 

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B. Enter injunctions, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Nagler and New Line from violating, directly or 

indirectly, Sections 206(1) [15 U.S.C. § 80b-6(1)] and 206(2) [15 U.S.C. § 80b-6(2)] of the 

Advisers Act; 

C. Enter injunctions, in a form consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, enjoining 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; 

D. Order Defendants, jointly and severally, to disgorge all ill-gotten gains received 

directly or indirectly, with pre-judgment interest thereon, as a result of the alleged violations, 

pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 

78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

E. Order Defendants to pay civil penalties pursuant to Section 209(e) of the Advisers 

Act [15 U.S.C. § 80b-6(9)(e)]; and 

F. Grant such other and further relief as this Court may deem just and proper. 

 

 

 

 

 

 

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JURY DEMAND 

The Commission demands a trial by jury on all claims so triable. 

 

Dated: June 2, 2025 

      By: /s/ Zachary T. Carlyle____            
       Zachary T. Carlyle 
       Rachel E. Yeates     
       ATTORNEYS FOR PLAINTIFF 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 
1961 Stout St., 17th Floor 
Denver, Colorado 80294 
Telephone:  303.844.1084 (Carlyle) 

303.844.1060 (Yeates) 
Email:  [email protected] 

[email protected] 
 

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