U.S. Securities and Exchange Commission Litigation Release No. 26525, dated April 9, 2026.
The SEC charged Kyle James Asman and his firm, Backswing Ventures GP LLC, for defrauding investors in a private fund. They allegedly paid themselves excessive management fees, failed to provide required financial statements, and misrepresented fund information and Asman's credentials.
In Plain English
Imagine you hired someone to manage your piggy bank. This person was supposed to follow specific rules about how much they could take out for their work. Instead, they took out way more money than allowed, almost seven times as much! They also didn't give you the regular updates or official reports about your piggy bank's money that they promised, and they weren't honest about what was happening with the money or their own qualifications.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Establish Investment Fund Kyle James Asman, through his entity Backswing Ventures GP LLC (BVGP), acted as an investment adviser for a private fund called Backswing Ventures Fund I, LP (BVLP). BVLP was set up to invest money from various investors.
- Promise Specific Fee Structure The offering materials for BVLP, including the Confidential Private Placement Memorandum (PPM), outlined how BVGP would be entitled to management fees based on specified calculations. Investors relied on these stated terms.
- Charge Excessive Management Fees Contrary to the fund documents, Asman and BVGP allegedly paid themselves in excess of $515,000 in management fees during the first year of BVLP's operation. This amount represented over 23% of the capital contributions, significantly more than they were entitled to.
- Fail to Obtain Audited Financial Statements As investment advisers, Asman and BVGP had a duty to provide investors with required audited financial statements. However, they allegedly failed to engage an independent auditor for BVLP, thus not providing these crucial reports.
- Neglect Unaudited Financial Statements In addition to audited statements, the defendants also allegedly failed to provide investors with unaudited financial statements of BVLP at the required intervals, leaving investors without timely updates on their investment's performance.
- Misrepresent Fund Information The complaint further alleges that Asman and BVGP defrauded investors by misrepresenting key fund information. This included false statements or omissions regarding fund subscription details, the status of fund investments, the audit status, and even Asman's own professional credentials.
- Breach Fiduciary Duty By charging excessive fees and failing to provide required disclosures and accurate information, Asman and BVGP allegedly breached their fiduciary duty to BVLP and its investors, acting in a fraudulent, deceptive, or manipulative manner.
The Enforcement Action
On April 9, 2026, the SEC filed charges against Kyle James Asman and Backswing Ventures GP LLC in the U.S. District Court for the Middle District of Florida. The SEC alleges violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil money penalties.