SEC charges Broidy Wealth Advisors with overbilling clients, stealing from their trusts

The Securities and Exchange Commission charged Broidy Wealth Advisors and its owner with overbilling clients and stealing assets from their trusts to fund personal expenses, including leases on two luxury cars.

The investment advisory firm and its owner, Marc D. Broidy, who resides in Beverly Hills, Calif., took in more than $1.4 million in ill-gotten gains since February 2011, according to the SEC’s complaint Thursday. He allegedly used the money to pay for his home mortgage, overseas trips and leases on two Mercedes-Benz vehicles.

Mr. Broidy, 43, misappropriated about $865,000 in assets from clients’ trusts for which he was trustee, according to the SEC complaint. He also billed customers an excess of $643,000, allegedly taking steps to cover it up by altering management fees charged by broker-dealers that worked with Broidy Wealth Advisors.

“Broidy fell well short of his fiduciary obligations as an investment adviser by misappropriating money and failing to disclose important conflicts of interest to his clients,” Andrew Calamari, director of the SEC’s New York regional office, said in a statement Thursday.

Mr. Broidy misled advisory clients about investments made in privately held companies by not disclosing his affiliation with them.

“He omitted information about the financial and operational status of those companies, his compensation for soliciting investments, and his role as a board member,” the SEC said in the complaint.

Broidy Wealth Advisors was initially headquartered in East Aurora, N.Y., and is currently based in Beverly Hills, Calif., according to the SEC.