Investment Advisor John Richard Brodacki III Under SEC Investigation

• July 16, 2026
• Uncategorized

Broker’s Background

 

John Richard Brodacki III (CRD #: 4384857) was registered with Bay Colony Advisory Group, Inc. as a broker and investment advisor. John’s past employers include IDS Life Insurance Company, American Express Financial Advisors Inc., Equity Services, Inc., Asset Strategy Advisors, LLC and Bay Colony Advisors.

 

Current and Past Allegations of Conduct Leading to Investment Loss

 

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in April 2026, John Richard Brodacki III was placed under investigation by the SEC alleging, “Plaintiff, Securities and Exchange Commission (the “Commission”), alleges the following against defendants the Personal Representative of the Estate of John R. Brodacki, III (the “Estate”), and Castle Hill Financial Group, LLC (“Castle Hill”) that this suit arises from the actions of John R. Brodacki, III (“Brodacki”), prior to his death on or about March 23, 2026. Brodacki and his company, Castle Hill were investment advisers who owed fiduciary duties to their advisory clients. Brodacki and Castle Hill breached those fiduciary duties by engaging in a fraudulent scheme, using deceptive devices, and making and using false and misleading statements to misappropriate and misuse money from certain of their advisory clients. In total, the Commission estimates that Brodacki and Castle Hill obtained over $1.8 million to which they were not entitled from at least 18 of their advisory clients between at least June 2018 and September 2025 (the “Relevant Period”). Brodacki and Castle Hill fraudulently induced at least 18 of their advisory clients, many of whom were elderly, retired or seriously ill, to transfer money to Castle Hill. Brodacki told these advisory clients that their funds would be used to make investments for their benefit and/or the benefit of their relatives. Instead of making such investments to benefit the advisory clients and their relatives, Brodacki and Castle Hill misappropriated those funds, and used the funds to pay Brodacki’s own personal and business expenses, to make repayments to other advisory clients, and to make payments to Brodacki’s own family members. Those personal expenses included lavish meals, membership fees to exclusive social clubs, travel, and tuition for Brodacki’s family members. Brodacki’s and Castle Hill’s actions thus have some of the hallmarks of a Ponzi scheme. In furtherance of their scheme, Brodacki and Castle Hill provided some of these advisory clients with fabricated account statements showing the purported value of the investments they claim to have made for these clients. Some of these advisory clients sought and obtained partial repayments of the money they sent to Castle Hill. After deducting those partial repayments of approximately $162,750, the Commission estimates that Brodacki and Castle Hill misappropriated approximately $1.68 million from the advisory clients they targeted in their scheme. As a result of the conduct alleged herein, Brodacki and Castle Hill violated, and unless Castle Hill is restrained and enjoined, it will continue to violate, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”)”.

 

In addition, John Richard Brodacki III has been the subject of one past FINRA disclosures, including the following:

• July 2025 – Discharged after “ Brodacki allegedly accepted a financial planning fee from a client which appears to be a loan from the client to Castle Hill Financial Group LLC, an entity believed to be owned or controlled by Mr. Brodacki, without notice to or approval from Bay Colony Advisors”.

For a copy of John Richard Brodacki III’s FINRA Broker Check, click here

 

We Help Investors Recover Investment Losses

 

Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

 

Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.

 

Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed.  FINRA Rule 3280 prohibits Financial Advisors from engaging in Private Securities Transactions, which are securities transactions that take place away from the employing brokerage firm.  The purpose of these rules is to ensure that Financial Advisors do not engage in selling away.  The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business, or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.

 

The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.

 

FINRA Rule 2150 specifically addresses theft and conversion in a customer account, stating “no member or person associated with a member shall make improper use of a customer’s securities or funds.”  This rule includes any “guarantee” that brokers make to customers in relation to losses incurred in a brokerage account.

 

In addition, FINRA Rule 3240 strictly prohibits a financial advisor from borrowing money from a client absent from unique circumstances, such as a familial relationship between the Financial Advisor and the client.  There is also an exception if the client is a financial institution regularly engaged in the business of lending.  The reason for this prohibition is clear—borrowing money from clients creates an immediate conflict of interest and can potentially lead to theft or conversion of client assets.

 

Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation. Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

 

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies, and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (855) 289-7868 or by email at mwolper@wolperlawfirm.com