Lawsuit alleges Lasater Capital hid fund losses whereas promising zero danger

A Texas investor alleges a Southlake private equity agency bought him on guarantees it couldn’t hold.

The investor filed a criticism on October 22 within the US District Court for the Northern District of Texas towards Lasater Capital, LLC – previously generally known as KeyCity Capital – three KCAP-branded financial backing funds, and three of the agency’s principals.

According to the criticism, the investor put $450,000 into two funds in late 2022 and early 2023. The agency’s advertising supplies on the time promised an “impeccable monetary document with no capital losses, no missed most well-liked dividends, and persistently exceeds focused returns,” the submitting states. Pitch decks additionally marketed “Zero Principal Losses” and returns that may “Always Exceed Targeted Returns,” in keeping with the criticism.

Nearly 4 years on, the investor alleges he has acquired simply $31,335.34 in money. None of his principal has been returned, the criticism states. Another $210,950.01 in credited earnings was by no means paid to him. The submitting alleges these earnings had been rolled into his capital accounts as if he had agreed to reinvest them – regardless of his election to obtain money distributions.

The criticism leans closely on a June 9, 2026 emergency cease-and-desist order from the Texas State Securities Board, recognized as Order No. ENF-26-CDO-1898. According to the submitting, the TSSB discovered that since roughly 2024, affiliated entities had “defaulted on loans exceeding $100 million,” misplaced properties by way of foreclosures, filed Chapter 11 bankruptcies, and been positioned in receivership – all whereas the agency’s web site continued to say it had “protected the whole lot of the investor principal” and “by no means missed a distribution.” The criticism states the TSSB additionally discovered the fund pursuits had been securities bought with no allow by way of “materially deceptive statements” whereas “materials data was deliberately withheld.”

The submitting paints an image of a Sunbelt multifamily actual property operation that was stretched too skinny and falling aside. In September 2025, the criticism says, a lender foreclosed on a six-property, 1,240-unit house portfolio in Memphis held in a separate KCAP fund – a portfolio the agency’s web site had valued at $106 million only one 12 months earlier, in keeping with the submitting. Further foreclosures on properties in Bryan and Joshua, Texas adopted in August 2025, the criticism alleges.

The lawsuit additionally describes structural adjustments the submitting says labored towards present traders. About 4 months after the investor put his cash in, in keeping with the criticism, the agency amended one fund’s partnership settlement by itself to permit loans to its personal affiliated entities. The modification itself acknowledged these loans “contain conflicts of curiosity on the a part of the General Partner,” the submitting states. The criticism alleges the change was pushed by way of through a passive-consent e-mail that buried the supply in connected redlined paperwork.

When the investor’s two-year financial backing time period in one of many funds ended round late November 2024, his capital was not returned, the criticism says. A written redemption request submitted months earlier went unanswered, in keeping with the submitting.

The promotional operation saved working within the background, the criticism alleges. Instagram adverts for a more moderen fund claimed that “in 20+ years managing over $500 million in belongings, we’ve by no means misplaced investor capital,” in keeping with the submitting. The criticism says the agency’s CEO styled himself “The World’s #1 Capital Closers Coach” and used talking charges, syndicated radio, social media, and movie star endorsements to advertise alleged projected returns of 20% or extra.

The criticism references different litigation towards the agency and its principals, together with a November 2025 lawsuit within the Southern District of Iowa alleging “fraud” in reference to a separate KCAP fund, and a case within the Southern District of California by which the submitting states a 72-year-old investor alleges the lack of roughly $1 million in retirement financial savings. A July 2025 default judgment of $525,000 plus $143,722.36 in curiosity towards the agency and two of its principals in a separate matter is now on attraction, in keeping with the criticism.

The criticism brings 11 counts. The headline claims are federal securities fraud and Texas Securities Act violations. The submitting additionally alleges common-law fraud, breach of contract, and breach of the responsibility of loyalty the agency owed its traders. Two counts are introduced on behalf of the funds themselves, alleging the agency’s principals wasted fund belongings by funneling cash to distressed associates and gathering charges whereas distributions had been frozen.

The investor seeks damages together with his $450,000 in unreturned principal and $210,950.01 in withheld earnings, together with attorneys’ charges and different aid.

The allegations within the criticism haven’t been examined, and no courtroom has dominated on any of the claims.