The SEC has sued South Carolina-based private equity firm Broad Street Global Management LLC in a Florida federal court. In its complaint, the SEC alleges that the firm defrauded investors out of over $1 billion and diverted $170 million of those funds into separate accounts controlled by CEO David Feingold and accounts overseen by fund managers and brothers Joseph Baldassarra and Steven Baldassarra.

In its heavily redacted complaint, the SEC states Broad Street’s executives made false statements and promises to its investors about the profitability of some of the funds they manage. The SEC also alleges that the trio raised over $1 billion using false statements and other deceptive practices.

With over 1,000 investors, the company purported that they would have the opportunity to access several types of investments. The fund was divided up into multiple “series” where participants could choose from real estate investments or others such as funding for small businesses. These small business funds were called merchant cash advances, or MCAs. These investors received inflated returns on their investments that were unsupported by profits from these MCAs.

Additionally, despite telling investors that the investment pools would be kept separate, funds were, according to the SEC’s complaint, “extensively commingled.”

The SEC is seeking injunctions, disgorgement, and civil penalties against Broadstreet and its executives for the alleged fraudulent activities initiated in October of 2020. According to the SEC, the fraudulent activities are continuing, and it plans to ask for a freeze on assets and to have a receiver appointed.

Five months prior to the SEC complaint, Broadstreet sued the SEC, accusing it of overstepping its regulatory authority and conducting a “fishing expedition,” an investigation that it believes is unconstitutional. Some of the SEC’s evidence in this case was submitted was done under seal “[o]ut of an abundance of caution” to avoid disclosing information in Broadstreet’s lawsuit filed in Texas.

Did You Invest With Broad Street?

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities fraud attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.