Barred Broker Admits Orchestrating $100M Ponzi Scheme
Brenda Smith, 61, of Philadelphia, pleaded guilty by
videoconference before U.S. District Judge Madeline Cox Arleo to count seven of
an indictment charging her with securities fraud.
The securities fraud count she pleaded guilty to carries a
maximum penalty of 20 years in prison and a $5 million fine, according to
Honig. Sentencing is scheduled for Jan. 20.
Smith managed and controlled Broad Reach Capital, a pooled
investment fund/hedge fund that was established in February 2016 and was open
to accredited investors with a minimum investment of $1 million, according to
Honig.
She first became registered as a broker when she joined
Kildare Capital in 2006, according to her report on the Financial Industry
Regulatory Authority’s BrokerCheck website.
Smith voluntarily resigned from CV Brokerage in June 2019,
according to a disclosure on her report.
She was barred by FINRA in July 2019 after she allegedly
refused to provide documents and information requested by the regulator while
it was investigating potential misstatements she made about the financial
performance of an investment fund in the course of private securities
transactions she participated in.
On Aug. 27, 2019, the Securities and Exchange Commission
filed a complaint against Smith in U.S. District Court for the District of New
Jersey, alleging she, Broad Reach Capital, Broad Reach Partners and Bristol
Advisors ran an investment advisory fraud scheme in which the defendants
solicited over $100 million from investors to supposedly invest in securities
trading strategies.
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