SEC Charges Broad Reach Capital CEO Brenda Smith with Allegedly Running a $63 Million Ponzi Scheme
Brenda Smith, 60, the CEO of Broad Reach Capital, LP, has been charged with running a $63 million Ponzi scheme, InvestmentNews reported on August 27, 2019, citing an SEC complaint. Federal authorities arrested Brenda Smith at her condo in Philadelphia’s posh Rittenhouse Square neighborhood. She is being charged with four counts of wire fraud and one count of securities fraud.
Brenda Smith, who also goes by Brenda A. Smith and Brenda Ann Smith, ran various investment companies based in West Conshohocken, Pennsylvania. The companies included Broad Reach Capital, LP; Broad Reach Partners, LLC; and Bristol Advisors, LLC. While Brenda Smith allegedly made the companies look robust, in reality she was the only employee of each company.
According to the SEC’s press release, starting in 2016, Brenda Smith allegedly convinced 40 high-net-worth investors to invest more than $105 million with her hedge funds. She told them that they would earn 30 percent returns. Instead of investing those millions for the benefit of her clients, however, she instead allegedly used the money for personal enrichment and to pay back earlier investors—one of the hallmarks of a Ponzi scheme.
She allegedly created fake account statements to placate investors when fund assets began to shrink. The alleged scheme began to unravel when one investor tried to cash in on his money and was instead met with Brenda Smith’s plethora of excuses for why she could not fulfill his request. Delayed payments or trouble cashing in your investments are other hallmarks of a Ponzi scheme.
According to the SEC, Broad Reach Capital alleged distributed a false statement valuing its assets at $180 million. In reality, the SEC alleges, most of that money is gone and “investors are still owed more than $63 million in principal.”
If you’ve invested with Broad Reach Capital, Broad Reach Partners, or Bristol Advisors, please don’t wait to contact an experienced securities attorney about your interactions with Brenda Smith. Call Fitapelli Kurta at (877) 238-4175 or email firstname.lastname@example.org to speak with Jonathan Kurta or Marc Fitapelli about your potential case