SEC Charges Florida Adviser With Stealing Fees, Deceiving Fund Investors

The SEC charged a Florida investment adviser with siphoning more than $515,000 in management fees from a private fund, an amount representing over 23% of the fund's total capital contributions, while deceiving investors about audit oversight, the fund's holdings, and his own professional credentials.

The commission filed a civil enforcement action on April 9 against Kyle James Asman and his firm, Backswing Ventures GP LLC, in U.S. District Court for the Middle District of Florida. The complaint alleges that Asman and Backswing Ventures paid the fees to themselves in direct violation of the fund's own governing documents, effectively misallocating assets that investors were contractually entitled to have protected.

The alleged misconduct extended well beyond the fee overcharges. According to the SEC's complaint, Asman and Backswing Ventures failed to hire an independent auditor and never delivered the required audited financial statements to investors. They also failed to provide unaudited financial statements on the intervals the fund documents required. On top of those omissions, the complaint accuses the defendants of misrepresenting subscription information, fabricating details about the fund's actual investments, mischaracterizing the audit status, and falsely portraying Asman's own credentials to both current investors and prospective ones.

The SEC is seeking disgorgement of ill-gotten gains, civil penalties, and injunctive relief. A successful outcome for the commission could result in Asman being barred from serving in advisory roles or subjected to ongoing compliance requirements.

The case reflects the SEC's sustained attention to fee transparency and disclosure obligations at private funds, which typically serve accredited or institutional investors who depend heavily on adviser representations and audited financials to evaluate their holdings. The agency's enforcement posture signals that even smaller private fund operations face scrutiny over whether advisers honor the terms written into their own fund documents.

For the private fund industry broadly, the action is a reminder that regulators are actively reviewing whether fee arrangements align with governing documents and whether required audit and reporting obligations are being met. Fund managers who fall short on either dimension, the case suggests, can expect civil consequences regardless of their fund's size or profile.