The agency said he directed staff to authorize client agreements with signature stamps showing they had orally agreed to increases in fees that they hadn’t actually agreed to.
“Beginning by at least approximately October 2015, [Crossroads], at Elstun’s direction, charged four professional athlete advisory clients for which he was [the firm’s] IAR … a higher advisory fee percentage than the clients agreed to pay in their asset management agreements.
“Despite the asset management agreements limiting the annual fee to a maximum of 1.00% of assets under management, by at least approximately October 2015, [Crossroads], at Elstun’s direction, began charging each of these four advisory clients an annual fee of 1.25% of their assets under management.
“To further his fraud and avoid detection,” the SEC said, "Elstun directed his [Crossroads] administrative staff employees to fabricate advisory agreements with phony fee percentages, which he then produced to the SEC staff.”
Crossroads Financial Management, which had $125 million in assets under management at the end of 2018, the SEC said, was dissolved in July 2020. Elstun is currently working at Frontier Wealth Management in Kansas City as a wealth strategist.
The SEC complaint did not name the athletes it says were overcharged. However, a profile of Elstun in the Kansas City Star in 2016 said he worked with 14 pro athlete clients and the article named several of them: They included David West, a basketball player formerly of the Golden State Warriors; Will Shields, a Pro Football Hall of Famer with the Kansas City Chiefs; Darren Sproles, a football player formerly with the Philadelphia Eagles; and basketball player Brandon Rush of the Minnesota Timberwolves.
Elstun himself played collegiate basketball at the University of North Carolina and University of Kansas in the late 1980s and early 1990s.
The SEC filed the complaint in the U.S. District Court for the Western District of Missouri, Western Division.