- Claim:
- That a real estate sponsor had "grown their business, protected the entirety of the principal, and never missed a distribution.
- Scope:
- Lasater Capital's Fund 14, per a Texas emergency order
- Fund 14 raised from 53 investors, per the order
- $5.6 million
- Returns Fund 14 was marketed as targeting, alleged
- up to 20%
- Affiliated loan defaults, exceeding, as alleged
- $100 million
- Estimated commissions on the raise, per the order
- $750,000
- Finding:
- On 9 June 2026 the Texas State Securities Board entered an Emergency Cease and Desist Order against Lasater Capital, LLC and two individuals. The order quotes that website claim and sets it against a list of affiliated defaults, foreclosures, bankruptcies and a receivership. Every factual assertion in this autopsy comes from that order and from the Board's own news release.
- Confidence:
- High that the Board has alleged these specific things — they are quoted from a public state document we downloaded and read. Zero on whether they are true, because nothing here has been tested. An emergency order is issued on one side's evidence, before the other side is heard.
- Docket:
- ENF-26-CDO-1898
Open: nothing here has been proven or decided. What would change this verdict
Verdict: Open
The claim
The claim under autopsy is one sentence, and the order quotes it directly. Paragraph 19:
Despite these facts, Respondent Lasater Capital’s website still touts the success of KeyCity, claiming they have grown their business, protected the entirety of the principal, and never missed a distribution.
Three assertions, stacked. Grew the business. Never lost investor principal. Never missed a payment.
Alongside it, the marketed terms of the fund being sold. Paragraph 10:
Respondents represent Fund 14 is targeting returns of up to twenty percent (20%), quarterly cash flow distributions, and a projected two-times equity multiple over approximately five (5) years.
Read that carefully, because the wording is more careful than the pitch it sits inside. “Targeting” is not promising. “Projected” is not guaranteeing. Nothing in that sentence is a commitment, and a sponsor’s lawyer would tell you so.
Steelmanned, none of this is absurd. Multi-family real estate sponsors do raise funds, do target double-digit returns, and do pay quarterly distributions. A track record of protecting principal is exactly what a sponsor should be judged on. The question a regulator asks is not whether the claim is impressive. It is whether the things omitted alongside it would have changed how an investor read it.
The evidence
The order states what the fund had raised, sourced to the respondents’ own federal filings. Paragraph 13:
According to filings with the U.S. Securities and Exchange Commission, Fund 14 has already raised approximately $5.6 million from fifty-three (53) investors with estimated commissions of approximately $750,000.00.
Fifty-three investors. Minimum investment around $100,000, against a $10 million target raise. Roughly $750,000 in estimated commissions on $5.6 million raised, which is about 13% of the money in.
Then the list the claim sits next to. Paragraph 17 alleges that since approximately 2024, multiple affiliated entities have “defaulted on loans exceeding $100 million,” lost properties through foreclosure, filed Chapter 11 bankruptcies, been sued by lenders and investors, and been subject to receivership proceedings.
Paragraph 18 itemises:
| What the order lists | Figure it attaches |
|---|---|
| Foreclosure proceedings, six multi-family properties in Memphis | approximately $84 million in secured debt |
| Litigation resulting in judgments involving KCAP Meadows entities | exceeding $24 million |
| Chapter 11 filings | four named entities |
| Appointment of a receiver over the Meadows at Ferguson property | by the City of Dallas |
| Investor lawsuits | alleging fraud, misrepresentation, elder abuse, securities violations |
The dollar figures the order sets beside the website claim
The order also states a separate, simpler allegation that does not depend on any of the above. Paragraph 20: the fund investments “constitute securities and no permit has been granted for their sale in Texas.”
What the evidence supports and does not
It supports this: a state securities regulator, having reviewed its Enforcement Division’s evidence, concluded there was enough to stop the offering immediately rather than wait. That is what an emergency order is. Section 4007.104 exists for situations a regulator does not think can wait for a hearing.
It does not support calling anyone a fraud. Every item in that table is the Board’s characterisation, entered without the respondents having contested it. “Investor lawsuits alleging fraud” are lawsuits alleging fraud. Allegations inside allegations do not compound into fact.
It does not support any statement about what investors lost. The order does not say Fund 14 investors lost money. It says the offering was made without a permit and without disclosing adverse history at affiliated entities. Those are disclosure and registration allegations, not loss findings.
And it does not support treating the $100 million as a number attached to this fund. Read the sentence again: it describes entities affiliated with a predecessor company, not Fund 14’s own book. The regulator’s theory is that this history was material to someone deciding whether to hand over $100,000 — not that the history happened inside the fund being sold.
One more thing we are not going to do. We made no attempt to contact anyone named here, so we are not going to write that anyone declined to comment. No request was made. Absence of a response we never sought is not a fact about them.
Cause of death
The claim did not die of being false. Nothing here establishes that it was.
It died of standing alone. “Protected the entirety of the principal” is a claim about a track record, and a track record is only meaningful against the full set of things that happened. The regulator’s entire theory, stripped of legal language, is that the sentence was true-sounding because of what sat outside the frame.
This is the recurring anatomy in this file. The passive-income pitches that draw enforcement attention are usually not built on invented numbers. They are built on real numbers with the losing quarter left out, real track records that begin at a convenient date, real distributions that were genuinely never missed by an entity that is not the one you are being asked to invest in. Other real estate pitches are examined in the RAD Diversified autopsy and the Location Ventures autopsy.
The defence against it is not detecting lies. It is asking what a claim is being measured against, and noticing when nobody will tell you.
What would change this verdict
A hearing outcome. If the respondents requested one within the 31 days and prevailed, the order’s factual findings do not survive as stated, and this autopsy needs rewriting rather than updating.
A final order. If no hearing was requested, the order became final and non-appealable by operation of the notice provision, which resolves its administrative status without any of it being litigated on the merits. Final is not the same as proven, and we would say so.
Evidence about Fund 14 itself. Everything adverse in the order is about affiliated and predecessor entities. A record of what happened to the 53 investors’ $5.6 million would change what this file is about.
Any statement from the respondents. There is none in anything we read. If one exists or appears, it belongs here.
Frequently asked questions
What do Texas regulators allege?
The Texas State Securities Board alleges the sponsor's own website claimed it had "grown their business, protected the entirety of the principal, and never missed a distribution" while affiliated entities had defaulted on loans exceeding $100 million. These are allegations in an emergency order.
What is the status of the order?
The emergency order was entered on 2026-06-09 and has never been tested at a hearing. The post could not determine from the public record whether a hearing was requested.
Has anyone been charged with a crime?
Per The Real Deal's 30 July 2026 report, the individuals involved "have not been formally charged with any crimes".
Does the $100 million belong to this fund?
No. The $100 million describes entities affiliated with a predecessor company, and the post says it is not a number attached to the fund's own book.
What did the fund raise?
The order states 53 investors, a minimum investment around $100,000 against a $10 million target raise, and roughly $750,000 in estimated commissions on $5.6 million raised. It separately alleges the fund investments are securities and that no permit was granted for their sale in Texas.