What You Need to Know
- A former broker and investment fund manager faces up to 20 years in prison for running a Ponzi scheme.
- She also faces a $5 million fine after pleading guilty to securities fraud.
- She was barred by FINRA in July 2019 after she allegedly refused to provide documents and information it requested.
A former broker and investment fund manager admitted on Thursday to orchestrating a $100 million Ponzi-like securities fraud scheme, according to acting U.S. Attorney Rachael A. Honig.
Brenda Smith, 61, of Philadelphia, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to count seven of an indictment charging her with securities fraud.
The securities fraud count she pleaded guilty to carries a maximum penalty of 20 years in prison and a $5 million fine, according to Honig. Sentencing is scheduled for Jan. 20.
Smith managed and controlled Broad Reach Capital, a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million, according to Honig.
She first became registered as a broker when she joined Kildare Capital in 2006, according to her report on the Financial Industry Regulatory Authority’s BrokerCheck website.
Smith voluntarily resigned from CV Brokerage in June 2019, according to a disclosure on her report.
She was barred by FINRA in July 2019 after she allegedly refused to provide documents and information requested by the regulator while it was investigating potential misstatements she made about the financial performance of an investment fund in the course of private securities transactions she participated in.
On Aug. 27, 2019, the Securities and Exchange Commission filed a complaint against Smith in U.S. District Court for the District of New Jersey, alleging she, Broad Reach Capital, Broad Reach Partners and Bristol Advisors ran an investment advisory fraud scheme in which the defendants solicited over $100 million from investors to supposedly invest in securities trading strategies.