Investment Firm Alleges Kingswood Hijacked $10M Adviser Compensation
A legal battle has erupted between investment firm Solidaris Capital LLC and broker-dealer Kingswood Capital Partners LLC alleging that the San Diego, Calif.-based Kingswood fraudulently induced a payment of $10 million only to refuse to pass the money to the intended recipient: financial adviser Rikin Patel.
The federal lawsuit filed by Texas-based Solidaris claims that the broker-dealer engaged in a deliberate scheme, including manufacturing “regulatory concerns,” to keep the funds for itself – a move Solidaris’ founder described as an attempt at “extortion.”
Solidaris, led by founder and tax attorney Geoffrey Dietrich, specializes in what it calls a proprietary and “socially responsible turnkey investment strategy.” The structure was designed to raise capital for emerging technology companies, advance charitable missions, and allow investors to claim a significant charitable deduction.
According to the suit, the business expanded rapidly after Dietrich partnered in 2021 with Patel, an investment adviser representative who brought his extensive client network into Solidaris’ securities offerings through Kingswood, where he was a registered representative. According to the suit, Patel significantly increased annual funds raised into the hundreds of millions of dollars a year.
To incentivize Patel’s continued performance, Dietrich said he negotiated an agreement to compensate him with a share of the funds he helped raise. Kingswood’s Mike Nessim, chief executive officer, proposed that Solidaris pay the compensation – approximately $16.4 million – directly to the broker-dealer, which would then forward the money to Patel.
The agreement was formalized in writing on Dec. 31, 2024, under which Kingswood was to provide “investor support services” with Patel as the main point person.
Critically, Dietrich required and received written assurance on Jan. 6, 2025, from Mohamed Alsoraimi, chief compliance officer for Kingswood, that Kingswood would pay 100% of the money to Patel. Relying on this guarantee, Solidaris wired the first installment of $10 million to Kingswood on Jan. 13.
The complaint details a sequence of events following the wire transfer where Kingswood allegedly began a campaign to keep the money:
- Manufacturing excuses: Kingswood initially raised concerns that the payment needed investor disclosure and rescission offers. Solidaris complied immediately, according to the lawsuit, signing an addendum and a rescission agreement.
- The new demand: After compliance, Kingswood allegedly raised entirely new, unspecified “regulatory concerns” about paying Patel. Kingswood then offered to make these concerns “evaporate” if Patel and Solidaris agreed to let the firm keep $6 million of the $10 million payment.
When Solidaris and Patel refused to comply, Kingswood allegedly intensified the pressure. The firm notified Patel he was under a purported internal investigation without providing any details. Following this pressure, Patel resigned on March 18 of this year.
The suit further alleges that Kingswood retaliated against Patel by filing a false report with the Financial Industry Regulatory Authority, stating it had fired him and that he was under an investigation, a report which was backdated to the date of the $10 million wire transfer.
Solidaris is suing Kingswood for breach of contract, fraudulent inducement, and promissory estoppel, seeking the return of the $10 million payment and exemplary damages. Solidaris argues Kingswood fundamentally breached the agreement by refusing to pay Patel and then, due to Patel’s resignation, becoming incapable of providing the agreed-upon business development services.
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