Federal agents on Tuesday morning arrested a hedge fund CEO at her Rittenhouse Square condo, charging her in a massive fraud that rooked investors out of at least $63 million.
Brenda A. Smith, 59, ran a Conshohocken-based network of investment companies that included Broad Reach Capital, Broad Reach Partners, and Bristol Advisors. Smith was the only employee of each company. The funds “were essentially her alter-egos,” according to court papers.
Smith solicited more than $105 million from dozens of high-net worth individuals. She told them their money would net 30 percent returns with her sophisticated trading strategies.
She lied, prosecutors said. Instead of deploying those funds to make her alleged victims wealthier, Smith funneled the money through the web of entities she controlled.
Smith used the money to pay off previous investors, cover $2 million in personal American Express credit card charges, and make her own personal bets on the market, according to court papers.
To lull her existing investors, Smith allegedly created phony reports touting “outlandish and inaccurate” returns and claimed that she had never had a losing month.
Source: The Philadelphia Inquirer