The Securities and Exchange Commission on Tuesday charged Philadelphia investment advisor Brenda A. Smith with defrauding investors of over $100 million.
The SEC's complaint alleges that Smith and her fund Broad Reach Capital raised about $105 million from approximately 40 investors. She allegedly said she would invest the money in publicly traded securities that would generate consistent high returns, but in reality she used the money to repay other investors and for her own personal investments. The complaint alleges that Smith, and the entities she controls, also sent out false statements touting positive returns and fabricated documents in an attempt to inflate Broad Reach's assets and lull investors into believing their capital was safe.
The complaint, filed in federal court in Newark, N.J., charges Smith; the fund, Broad Reach Capital; its general partner, Broad Reach Partners; and the advisor, Bristol Advisors, with violating the anti-fraud provisions of federal securities laws. The court granted the SEC's request for an asset freeze and temporary restraining order. The SEC seeks disgorgement of ill-gotten gains and prejudgment interest, and civil penalties against the defendants.
According to the SEC, there is no known counsel for Smith.