Philadelphia Advisor Confesses to Conducting $100 Million Scheme

Posted on September 21st, 2021 at 4:17 PM
Philadelphia Advisor Confesses to Conducting $100 Million Scheme

From the Desk of Jim Eccleston at Eccleston Law:

A Philadelphia-based investment advisor, Brenda Smith, has confessed to operating a $100 million securities fraud scheme. 

Smith has owned and operated Broad Reach Capital LP since February 2016, which is a pooled investment fund available to accredited investors requiring a minimum investment of $1 million, according to court documents. Smith allegedly informed clients between February 2016 and August 2019 that their funds would be pooled into Broad Reach Capital’s proprietary trading strategies, such as dividend capture, VIX Convergence, and opportunistic trading. The complaint alleges that Smith misrepresented the performance of Broad Reach Capital to clients and prospective investors. 

Smith allegedly provided clients and prospective investors with fabricated historical performance statistics, such as claiming annual returns of 33% in 2017 as well as positive monthly returns in 2018. Nevertheless, court documents illustrate that the total cash and securities in Broad Reach Capital’s accounts decreased between December 2016 and June 2019. The complaint alleges that Smith generated at least $100 million in revenue from nearly 40 investors over the course of the scheme. Rather than investing client money in the pooled funds, Smith utilized million of dollars to fund other business and personal expenses including $10 million for mineral mining operations and $2 million to cover an American Express credit card bill. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, million dollar scheme, fraud

Return to Archive

TESTIMONIALS

Previous
Next

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

February 4, 2025
Wells Fargo Faces $3.37 Million FINRA Award Over Alleged Elder Exploitation

A FINRA arbitration panel has ordered Wells Fargo Clearing Services and its advisor, Stephen L. Smith, to pay approximately $3.37 million in damages to the estate of Genell Mathis.

February 3, 2025
Bank of America Agrees to Consent Order Over Anti-Money-Laundering Deficiencies

Bank of America Corp. has entered into a consent order with the Office of the Comptroller of the Currency (OCC) to address deficiencies in its anti-money-laundering (AML) and sanctions compliance programs.

January 31, 2025
UBS Settles FINRA Claims Over Supervision of Short-Term Preferred Stock Trades

According to AdvisorHub, UBS Wealth Management USA’s broker-dealer has agreed to pay $3.5 million in sanctions over allegations of supervisory failures related to short-term trading of syndicate preferred stock.