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

Jim, Stephany and the whole team were a God send.  We felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

Greg P.

LATEST NEWS AND ARTICLES

January 7, 2026
FINRA Releases 2026 Regulatory Oversight Report, Spotlighting Private Placement Compliance Risks

The Financial Industry Regulatory Authority (FINRA) released its 2026 Annual Regulatory Oversight Report, responding directly to member feedback and reinforcing its stated mission to protect investors and promote market integrity.

January 6, 2026
SEC Halts Review of Ultra-Leveraged ETFs, Citing Risk Limits

The U.S. Securities and Exchange Commission (SEC) has stepped in to curb the expansion of ultra-leveraged exchange-traded funds, issuing a series of warning letters that effectively block proposed products designed to deliver three- and five-times the daily returns of stocks, commodities, and cryptocurrencies.

January 5, 2026
FINRA Suspends Former UBS Broker Over Personal Credit Card Transfers

The Financial Industry Regulatory Authority (FINRA) has sanctioned a former UBS Wealth Management USA broker, Timothy R. Jones.