RIA Misappropriated Over $865K and Withdrew $640K in Excess Fees, Say Prosecutors
Broidy Wealth Advisors CEO Mark Broidy has pleaded guilty to taking $640K in excess management fees from clients and misappropriating over $864K in stock that were in trusts of which he was the trustee. Now, the registered investment advisor must make restitutions to those whom he defrauded. He could end up serving up to five years behind barsamong other penalties.
According to the Justice Department, from around 11/2010 to 7/2016 Broidy billed more than what he was allowed to in compensation, which caused three clients to pay more than $640K in excess fees. He concealed his theft by falsifying those clients’ IRS Form 1099s.
After one client demanded that Broidy pay back the stolen funds the latter allegedly sold over $865K of stock from another client’s trust accounts, which were for that person’s children. Broidy also suggested that several clients invest in startups with which he had deals to pay him part of any money he raised on the companies’ behalf. The clients didn’t know about these arrangements.