The Wolper Law Firm Expands Its Investigation On Behalf Of Victims Of The Alleged $105 Million Ponzi Scheme Orchestrated By Former CV Brokerage Financial Advisor, Brenda Smith
The Wolper Law Firm is updating investors regarding recent developments in its investigation against former CV Brokerage Financial Advisor, Brenda Ann Smith. Investors, who believe that they have been a victim, are encouraged to contact the Wolper Law Firm for a confidential, free and no obligation discussion regarding their legal options.
As previously repoirted, Brenda Smith was a Financial Advisor at CV Brokerage in West Conshohocken, PA. Brenda Smith has been in the securities industry since 2006 and previously worked at MCG Securities, Cretus Securities, DSRM Brokerage, Drexel Hamilton and Kildare Capital. During the relevant time period, Brenda Smith was registered with CV Brokerage, who was under a regulatory duty to supervise her sales practice activities.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2019, Brenda Smith “voluntarily resigned” from CV Brokerage for “non-compliance with FINRA Rules 8210 and 2010 in that Ms. Smith failed to provide documents and information requested in connection with a FINRA investigation into potential misstatements about the financial performance of an investment fund that were made during the course of private securities transactions in which Ms. Smith participated.”
In connection with those allegations, FINRA initiated an investigation, which resulted in a sanction, barring Brenda Smith from the securities industry for failing to participate in the investigation.
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2017052325901%20Brenda%20Smith%20CRD%204348518%20AWC%20va.pdf.
In addition, Brenda Smith is the subject of a pending customer complaint alleging “Fraud, Breach of fiduciary duty, breach of contract, unlawful conversion, violation of section 5104 of Pennsylvania uniform voidable transactin act and permanent injuctive relief. The complaint alleges $3,341,500 in damages.
For a copy of Brenda Smith’s CRD, click https://brokercheck.finra.org/individual/summary/4348518#disclosuresSection.
On August 27, 2019, the Securities and Exchange Commission filed an enforcement action against Brenda Smith and entities in which she is believed to control, alleging that Brenda Smith was operating a classic ponzi scheme. Specuifically, the SEC alleged:
“This case involves an investment advisory fraud in which Brenda A. Smith and the other Defendants solicited over $100 million from investors for purported investment in sophisticated securities trading strategies. However, Smith took the vast majority of these funds for unrelated companies, to pay back other investors, and for personal use. And, in 2019, confronted with at least one investor trying to redeem its investment, Smith created a fictitious valuation of assets backed by false claims that she held billions of dollars in assets through a company she owned.
From at least February 2016 through the present, Smith, defendant Broad Reach Capital, LP (“Broad Reach Fund” or the “Fund”), defendant Broad Reach Partners, LLC (“Partners”), and defendant Bristol Advisors, LLC (“Bristol”) (collectively, without Smith, the “Entity Defendants”), engaged in this fraud. Smith dominated and controlled the Entity Defendants such that they were essentially her alter egos. 3. Through the Entity Defendants, Smith offered limited partnership interests in the Fund to investors beginning in early 2016. Since the Fund’s inception, Smith raised approximately $105 million from at least 40 investors, and investors are still owed more than $63 million in principal. 4. To solicit and retain investors, Defendants 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 (“Trading Strategies”). In reality, only a small fraction of investor money was actually used for these strategies.“
A copy of the SEC’s complaint can be accessed by clicking https://www.sec.gov/litigation/complaints/2019/comp-pr2019-162.pdf
It has been revealed that Brenda Smith utilized a complex scheme to lure investors into the alleged ponzi scheme. Specifically, Brenda Smith allegedly promised clients 30% returns through investment in highly liquid securities. In reality, Brenda Smith allegedly siphoned millions away to pay for personal expenses and her own investments. She also utilized a series of shell corporations, including Broad Reach Capital, to facilitate the scheme. According to the SEC, investors allegedly received false account statements, reflecting that Broad Reach Capital held assets of $180 million.
In addition, Brenda Smith was indicted and charged with multiple counts of felony wire fraud and securities fraud. She is scheduled to appear in a Philadelphia court to meet the charges.
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 866.330.5167 or by email at email@example.com.
- Former West Park Capital, Inc. and Laidlaw & Company LTD Broker, Bryan Mazliach, Investigated By FINRA For Alleged Violation Of FINRA Rules
- Former BMO Harris Financial Advisors, Inc. Broker, Lori Ann Sacco, Suspended Six Months By FINRA For Allegedly Altering Customer Account Documents
- Former Woodbury Financial Services, Inc. Broker, Jodie Lane, Suspended Six Months By FINRA For Allegedly Accepting Gifts And Becoming Beneficiary Of A Client
- Broker, Kimberley Schkade-Hill, Supsended by FINRA For Four Months And Fined $10,000 For Allegedly Having Clients Sign Documents In Blank
- LPL Financial LLC Broker, Matthew Clason, Is The Subject Of An SEC Enforcement Action For Allegedly Stealing Hundreds Of Thousands Of Dollars From A Client
- Former Capitol Securities Management Inc. Broker, Michael Rubel, Suspended By FINRA For 45 Days For Allegedly Engaging In Short-term Trading Of Unit Investment Trusts
- Recovering Your Investment Losses In Non-Traded Real Estate Investment Trusts And Business Development Companies
- Former Westpark Capital, Inc. Broker, Hary Datys, Suspended By FINRA For Fifteen Months For Allegedly Failing To Conduct Due Diligence Before Selling Promissory Notes
- Former Ameriprise Financial Services, LLC Advisor, Arthur Hoffman, Barred By FINRA For Allegedly Failing To Provide Documents In Relation To Investigation Into Outside Business Activities
- Crown Capital Securities Broker, Kenneth Barroga, Has Had Four Customer Complaint Disclosures