Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Oct. 27 — Beverly Hills, Calif., investment adviser Marc Broidy is facing civil and criminal charges he overcharged his clients and misappropriated their assets to pay personal expenses ( SEC v. Broidy, E.D.N.Y., 1:16-cv-05960, 10/27/16 ; United States v. Broidy, E.D.N.Y., 16-cr-__, 10/27/16 ).
Broidy's investment advisory business, Broidy Wealth Advisors, also was named in the Securities and Exchange Commission's civil lawsuit.
The alleged misconduct netted the two approximately $1.5 million in unlawful profits. Their lawyer, Gerard Riso, Stein Riso Mantel McDonough LLP, New York, didn't respond immediately to an e-mailed request for comment.
Enforcement actions against investment advisers are on the upswing at the SEC. The agency filed a record number of cases—160—involving investment advisers and investment companies during fiscal 2016 (197 SLD, 10/12/16).
According to the SEC's lawsuit, Broidy over-billed clients approximately $643,000. He allegedly tried to cover up the excessive fees by doctoring broker-dealers forms before sending the forms to his clients.
Broidy also allegedly misappropriated approximately $865,000 from client trusts and didn't tell advisory clients that he was affiliated with certain companies in which they invested.
“Broidy fell well short of his fiduciary obligations as an investment adviser by misappropriating money and failing to disclose important conflicts of interest to his clients,” SEC regional enforcement director Andrew Calamari said in an Oct. 27 release.
The agency is seeking penalties and permanent injunctions against Broidy and his firm and an officer/director bar against Broidy.
In the criminal case, Broidy was arrested and slated to appear Oct. 27 before a magistrate judge in Los Angeles. In a release, federal prosecutors said they will seek removal to the U.S. District Court for the Eastern District of New York, where the SEC case was filed.
If convicted, Broidy faces up to 20 years in prison.
To contact the reporter on this story: Phyllis Diamond at firstname.lastname@example.org
To contact the editor responsible for this story: Seth Stern at email@example.com
To see the SEC complaint, go to http://www.bloomberglaw.com/public/document/Securities_and_Exchange_Commission_v_Broidy_et_al_Docket_No_116cv.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)