Securities & Exchange Commission (SEC) charged broker Marc Broidy and his firm, Broidy Wealth Advisors, for $1.4 million worth of ill-gotten gains, as per reports. It is believed that the firm profited off their client’s trusts by intentionally over-charging accounts.
It has also been reported that Marc Broidy allegedly used this money to finance his personal lifestyle, using the money to pay off mortgages, leases on his Mercedez-Benz cars and overseas trips. According to the SEC complaint, Broidy has misappropriated $865,000 from client’s accounts and billed $643,000 in excessive fees. He also reportedly misled clients by not disclosing his affiliation to certain private companies where investments were made. Briody Wealth Advisors had $25 million in assets under its management until this year, but the recent ADV from February 2016 reported $13.6 million.
According to an SEC risk advisory Office of Compliance Inspections and Examinations, they have increased their scrutiny of registered representatives. In Mr. Broidy’s case he “fell well short of his fiduciary obligations as an investment adviser”, according to SEC’s regional director.