The Securities and Exchange Commission charged a Los-Angeles based investment advisory firm and its owner 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, according to the complaint released Wednesday.
According to the SEC, Marc D. 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 Broidy fraudulently obtained additional funds to pay his personal expenses by misappropriating more than $865,000 in assets from clients’ trusts for which he was trustee. To cover up his personal use of the trusts’ assets, Broidy claimed to sell to the trusts shares that he personally owned in two privately-held, risky, start-up companies.