Marc Broidy Charged with Defrauding Investors in 3 Separate Schemes
On October 27, 2016 the Securities and Exchange Commission (“SEC”) charged a Los-Angeles based investment advisory firm and its owner, Marc Broidy with fraudulently overbilling clients and stealing assets from their trusts to pay such personal expenses as his home mortgage, overseas trips, and leases on two Mercedes-Benz vehicles.
The SEC’s complaint alleges that Broidy and his firm Broidy Wealth Advisors obtained more than $1.4 million in ill-gotten gains since February 2011. Broidy allegedly billed clients approximately $643,000 in excess fees And covered it up by altering the amount of management fees recorded on forms issued by brokerage firms before sending the forms to his clients. The SEC further alleges that he fraudulently obtained additional funds to pay his personal expenses by misappropriating approximately $865,000 in assets from clients’ trusts for which he was trustee.
According to the SEC’s complaint, Broidy also misled advisory clients about some investments they made in privately-held companies when he didn’t inform them he was affiliated with those companies.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today announced criminal charges against Broidy.
The SEC’s complaint charges Broidy and his firm with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 as well as Sections 206(1) and (2) of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions and penalties against Broidy and his firm and an officer-and-director bar against Broidy.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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