Fund Manager Pleads Guilty to $100 Million Ponzi Scheme

$100 money and handcuffs

A Philadelphia-based investment fund manager Brenda Smith has pleaded guilty in connection with her involvement in a $100 million Ponzi scheme.

Broad Reach Capital, LP

According to the U.S. Department of Justice, Smith was the owner and manager of an investment fund called Broad Reach Capital, LP, which was headquartered in Philadelphia, Pennsylvania. Smith required a $1 million minimum investment and successfully recruited more than 40 accredited investors into the fund.

In order to entice investors, Smith represented that the fund was “highly liquid” and “employed a robust risk management program.” Smith also claimed to have superior trading strategies that gave her fund an edge in the markets. Unfortunately, for investors, this was not the case.

Major Losses

Throughout the scheme, Smith created investor materials that materially misrepresented the fund’s performance and overall success. The fund claimed that it consistently achieved double-digit returns, but actually achieved double-digit losses throughout the life of the scheme.

For instance, Smith alleged that Broad Reach Capital achieved 33 percent returns in 2017. However, after SEC and DOJ investigations, total assets in the fund decreased between 2016 and 2019. Additionally, in February 2018, assets in Broad Reach Capital were down over 50 percent, but the fund reported positive return of 1.76 percent.

This is a frightening realization for investors, since Broad Reach Capital never held more than $32 million in its brokerage and bank accounts. Smith reportedly collected over $100 million, most of which she diverted to her personal investments and expenses.

According to her public BrokerCheck profile, Smith has several disclosures that are currently pending in court. One of these disclosures is a pending customer dispute amounting to over $3.3 million. These allegations include fraud, breach of fiduciary duty, breach of contract, and other related claims. There are several other civil and criminal charges pending in Smith’s case.


If you have suffered losses after investing with Broad Reach Capital, LP, and/or Brenda Smith (CRD #4348518), please contact Vernon Litigation Group to speak with our financial attorneys. We are currently investigating any claims that may exist against Brenda Smith of Philadelphia, PA, and/or Broad Reach Capital, LP.

About Us

Vernon Litigation Group represents investors across the United States in a wide range of financial disputes, including investment fraud, securities litigation, FINRA arbitration, breach of fiduciary duty, and more. Call us today at 239-319-4434 to discuss your rights and options in a confidential, no-cost consultation.

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