Tr?id=566623520170033&ev=PageView&noscript=1

SEC Charges Boca Raton Advisor with $2.1 Million Fraud Scheme

Posted on December 5th, 2024 at 3:58 PM
SEC Charges Boca Raton Advisor with $2.1 Million Fraud Scheme

From the desk of Jim Eccleston at Eccleston Law

The U.S. Securities and Exchange Commission (SEC) has charged David Kushner, a Boca Raton, Florida resident, and his company, La Mancha Funding Corp., with defrauding nearly two dozen investors out of approximately $2.1 million. InvestmentNews reports that the alleged misconduct occurred from September 2018 to April 2021 through a series of private securities offerings. Kushner serves as La Mancha’s president and sole owner.

According to the SEC’s complaint, Kushner and La Mancha raised about $10.5 million from investors through at least 33 limited liability companies (LLCs). These funds were intended for short-term loans to sports agents and professional athletes, including NFL players. However, the SEC alleges that Kushner and La Mancha made false statements to investors about the intended use of their money. They also breached their fiduciary duties by secretly taking hundreds of thousands of dollars in undisclosed origination and broker fees from the loan proceeds.

InvestmentNews reports that some investors became suspicious when they did not receive the expected principal payments. When contacted, Kushner allegedly lied, claiming that borrowers had not paid back the loans, even though they had. To support his false claims, Kushner sent at least one investor a fabricated account statement, falsely suggesting that a loan's due date had been extended.

The SEC’s complaint also accuses Kushner and La Mancha of misappropriating nearly $1.5 million in loan repayments that should have been returned to investors, according to the LLC operating agreements. Kushner allegedly used the misappropriated funds, along with the undisclosed fees, for personal expenses. These included payments for credit card bills, a child's college tuition, country club dues, luxury vehicles, a Hamptons rental home, and cashier’s checks made payable to himself or La Mancha. Additionally, Kushner reportedly transferred funds to a personal bank account and paid a diamond wholesaler, according to InvestmentNews.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

1775574785 Law
April 7, 2026
SEC Charges Long Island RIA and Executives in $138 Million Private Fund Scheme

A Long Island-based registered investment adviser and two of its senior executives now face parallel civil and criminal proceedings tied to an alleged scheme involving conflicted private fund investments, as reported by InvestmentNews.

1775496481 Law
April 6, 2026
FINRA Arbitration Panel Orders Fidelity to Pay $1.3 Million Over Structured Product Disputes

A Financial Industry Regulatory (FINRA) arbitration panel has ordered Fidelity Brokerage Services to pay approximately $1.3 million to two groups of clients who alleged misconduct tied to structured product investments, according to ThinkAdvisor.

1775253477 Law
April 3, 2026
FINRA Enforcement Trends Show Higher Monetary Sanctions Despite Fewer Cases in 2025

The Financial Industry Regulatory Authority (FINRA) increased total monetary sanctions in 2025, even as the number of enforcement actions declined.