Texas State Securities Board Enters Emergency Order Against Southlake Real Estate Investment Firm

AUSTIN, TEXAS - The Texas State Securities Board ("TSSB") has entered an Emergency Cease and Desist Order against Lasater Capital, LLC, its principals Shiloh Boone Lasater and Tie Glenn Lasater,[CO1.1] to stop the alleged offer and sale of securities through materially misleading statements and omissions involving a real estate investment fund being marketed to investors, including Texans.

According to the order, Lasater Capital has been offering investments in a real estate fund known as Lasater RE Fund 14, which is being marketed as an opportunity to invest in diversified multi-family and real estate-related assets. The respondents represented that investors could receive quarterly cash flow distributions, equity appreciation, and targeted returns of up to 20 percent. The fund reportedly sought to raise approximately $10 million and had already raised approximately $5.6 million from more than 50 investors.

The enforcement action alleges that the respondents controlled KeyCity Capital, LLC and failed to disclose material information concerning the financial condition and operational history of affiliated entities and prior real estate investment offerings. According to the order, numerous affiliated entities experienced significant financial distress, including loan defaults exceeding $100 million, foreclosures, Chapter 11 bankruptcy proceedings, receivership actions, investor litigation, and multimillion-dollar judgments.

"Investors are entitled to all material information when evaluating investment opportunities," said Jeramy Heintz, Director of the Enforcement Division for the TSSB. "Beyond that, issuers also owe investors the duty to disclose. When promoters highlight projected returns, experience, and track records while failing to disclose significant adverse events, investors may be deprived of information necessary to make informed investment decisions."

The order alleges the respondents engaged in fraudulent, deceptive, and misleading practices by:

• Failing to disclose multiple bankruptcies involving affiliated entities;
• Failing to disclose defaults on loans exceeding $100 million;
• Failing to disclose foreclosures involving affiliated properties and investment funds;
• Failing to disclose the appointment of a receiver for an affiliated Dallas multifamily property;
• Failing to disclose investor lawsuits alleging fraud, misrepresentation, elder abuse, and securities violations; and
• Continuing to tout a successful track record while omitting information relating to financial distress, judgments, and litigation involving affiliated entities.

The order further alleges that the real estate fund interests constitute securities under Texas law and that no permit has been granted for their sale in Texas. Although the respondents filed a notice claiming an exemption from registration, the order alleges they are not entitled to rely on any claimed exemption because they offered securities through materially misleading statements and omissions of material facts.

The Texas State Securities Board encourages investors to independently verify investment opportunities and carefully review offering materials before investing. Investors should be particularly cautious when evaluating private investment offerings that emphasize projected returns while failing to fully disclose material risks and prior business performance.

The investigation is being conducted by the Enforcement Division of the Texas State Securities Board.

Texans who have been solicited by Lasater Capital, LLC, Lasater RE Fund 14, or related entities are encouraged to contact the Enforcement Division through the Texas State Securities Board website at https://www.ssb.texas.gov, by calling (512) 305-8300, or by emailing [email protected].