Los Angeles investment adviser Marc Broidy, founder and CEO of Broidy Wealth Advisors, LLC, was arrested today on federal charges of securities fraud for allegedly stealing more than $1.5 million from his clients. Authorities say Broidy systematically overbilled accounts by withdrawing over $640,000 in unauthorized management fees and then covered his tracks by falsifying IRS Form 1099s to underreport the deductions.
Broidy didn’t stop there. When one wronged client uncovered the scheme and forced repayment through a settlement, Broidy turned to another client’s assets—specifically, trust accounts set up for a man’s children, with Broidy named as trustee. He allegedly liquidated more than $865,000 worth of stock from those trusts to cover personal expenses, including credit card bills, house payments, and car payments.
The criminal complaint, unsealed this morning, outlines a years-long deception stretching from November 2010 to July 2016. During that time, Broidy had discretionary authority over client brokerage accounts and was entitled to deduct pre-agreed management fees. Instead, he treated client funds like a personal piggy bank, manipulating records to hide his theft while maintaining the appearance of legitimacy.
“As alleged in the criminal complaint, through a web of lies and fabricated documents, Marc Broidy deceived his clients and betrayed their trust by using their investment accounts as his personal slush fund,” said United States Attorney Robert L. Capers for the Eastern District of New York. “When one client unearthed his fraudulent scheme, Broidy simply stole from another client in an effort to cover up his theft. His days of ‘robbing Peter to pay Paul’ have now come to an end.”
FBI Assistant Director-in-Charge William F. Sweeney, Jr., added that Broidy was caught red-handed but continued the fraud anyway, cashing out trust stocks he was legally obligated to protect. “Financial crimes have the potential to turn lives upside down and inside out. Victims of these types of crimes deserve to see justice served,” Sweeney stated.
Broidy is scheduled for an initial appearance this afternoon before U.S. Magistrate Judge Frederick F. Mumm at the federal courthouse in Los Angeles. The government will seek his removal to the Eastern District of New York, where the case will proceed. If convicted, Broidy faces a maximum sentence of 20 years in prison. The charges are allegations; he is presumed innocent unless proven guilty. The prosecution is being handled by Assistant U.S. Attorney Matthew Amatruda of the Business and Securities Fraud Section.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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