SEC Charged Former CV Brokerage, Inc. Broker Brenda Smith with Fraud
Posted on Monday, September 23rd, 2019 at 8:37 pm
In August 2019, the Securities and Exchange Commission (SEC) charged former CV Brokerage, Inc. broker Brenda Smith (CRD# 4348518) with operating an investment advisory fraud. The SEC also obtained an emergency asset freeze and a temporary restraining order.
According to the SEC complaint, “Smith and her fund Broad Reach Capital, LP, raised approximately $105 million from approximately 40 investors by representing that she would invest their money in publicly traded securities through various trading strategies that she championed as providing consistent high returns. However, Smith made very few investments in these trading strategies, and instead largely used investors’ money to repay other investors and for her own personal investments. The complaint alleges that Smith, and the entities she controls, also disseminated false statements touting positive returns and most recently fabricated documents in an attempt to inflate Broad Reach’s assets and lull her investors into believing their capital is safe.”
The complaint charged Smith, the fund, Broad Reach Capital, LP, its general partner, Broad Reach Partners, LLC, and the adviser, Bristol Advisors, LLC with violating the anti-fraud provisions of the federal securities laws. The SEC seeks disgorgement of ill-gotten gains and prejudgment interest, and civil penalties against the defendants.
In July 2019, Smith was barred by FINRA after she consented to the sanction and to the entry of findings that she refused to provide documents and information requested by FINRA in connection with an ongoing 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 she participated.
Smith was registered with CV Brokerage, Inc. in West Conshohocken, Pennsylvania from 2010 to June 2019, when she was terminated regarding, “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.”
Smith has been the subject of one customer complaint, according to her CRD report:
December 2018. “Fraud, Breach of fiduciary duty, breach of contract, unlawful conversion, violation of section 5104 of Pennsylvania uniform voidable transaction act and permanent injunctive relief.” The customer is seeking $3,341,500 in damages and the case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, CV Brokerage, Inc. may be liable for investment or other losses suffered by Smith’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.