Brenda A. Smith, of Philadelphia, Pennsylvania, is the subject of an SEC suit that alleges she engaged in fraudulent, deceptive, and manipulative business practices and perpetrated a Ponzi-like scheme, according to a Complaint filed in the U.S. District Court for the District of New Jersey under review by investor rights attorney Alan Rosca.
Brenda A. Smith, who worked out of West Conshohocken, Pennsylvania, along with her co-Defendants, allegedly solicited approximately $105 million from investors in the Philadelphia area and elsewhere for purported investment in sophisticated securities trading strategies, according to the aforementioned Complaint.
Investor rights attorneys Alan Rosca and Paul Scarlato, of the Goldman Scarlato & Penny PC law firm, are investigating activity related to Brenda A. Smith’s alleged Ponzi scheme. They are collecting evidence, have been interviewing individuals with direct knowledge of key aspects of Smith’s alleged scheme, and have identified a number of potential recovery options for investors. Their focus is on certain third parties that, they believe, played a role in assisting, enabling, or failing to prevent Smith’s alleged fraud.
Investors who believe they may have lost money in activity related to Brenda A. Smith’s alleged fraudulent, deceptive, and manipulative business practices are encouraged to contact attorneys Alan Rosca and Paul Scarlato with any useful information or for a free, no obligation discussion about their options.
Brenda Smith, from at least February 2016 through the present, along with defendants Broad Reach Capital, LP, defendant Broad Reach Partners, LLC , and defendant Bristol Advisors, LLC – all of which were entities she controlled – allegedly engaged in the aforementioned alleged fraud, the Complaint notes.
Smith, however, allegedly misused the vast majority of the funds she raised from investors for unrelated companies, to pay back other investors, and for personal use, and, in 2019, was confronted with at least one investor trying to redeem their investment, the Complaint further details.
Smith then allegedly created a fictitious valuation of assets backed by false claims that she held billions of dollars in assets through a company she owned, the Complaint reports.
Smith allegedly dominated and controlled the Entity Defendants such that they were essentially her so-called alter egos, the Complaint states.
Smith through the aforementioned Entity Defendants, allegedly offered limited partnership interests in the Fund to investors beginning in early 2016, the Complaint details.
From the Fund’s inception, Smith purportedly raised approximately $105 million from at least 40 investors, the Complaint states. Said investors are still owed more than $63 million in principal, the Complaint notes, and the case has all the telltale signs of an alleged Ponzi scheme, according to Reports from Philadelphia.
Brenda A. Smith, in order to allegedly solicit and retain investors, allegedly represented that the Fund employed several profitable, sophisticated trading strategies involving highly liquid securities, including those that it was uniquely positioned to pursue because of its access to the Philadelphia Stock Exchange trading floor, the Complaint states.
In truth, only a small fraction of investor money was actually used for these strategies, the Complaint states.
A good amount of the funds were allegedly moved through the bank accounts of entities Smith controls and ultimately used to, among other things, make her own personal investments and to repay other investors, the Complaint reports.
Smith, furthermore, in order to lull existing investors and solicit additional investments, allegedly provided monthly account statements reflecting high returns and so-called tear sheets touting the Fund’s overall claimed 30%+ yearly return and that the Fund had never had a losing month, the Complaint notes.
The SEC maintains that these and other performance statements were allegedly false, the Complaint details.
Brenda A. Smith has also been charged by the U.S. Attorney’s Office for the District of New Jersey with four counts of wire fraud and one count of securities fraud, the Complaint states.
Smith previously was disciplined by FINRA in June, and her registration was revoked and she was barred from associating with any FINRA member, FINRA notes.
An investment adviser serves in a position of trust and has a fiduciary duty to speak truthfully to clients… We allege that Ms. Smith breached her clients’ trust by misleading investors with false claims of how she invested their money and how those investments performed.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints mentioned in this article, unless otherwise indicated.
The Goldman Scarlato & Penny PC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Brenda A. Smith’s alleged fraudulent, deceptive, and manipulative business practices. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of Brenda A. Smith’s alleged fraudulent, deceptive, and manipulative business practices may contact attorneys Alan Rosca or Paul Scarlato for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at email@example.com, or through the contact form on this webpage.