Investors accuse Broadstreet fund of alleged billion-dollar 'Ponzi-like' scheme

Roughly 60 investors are suing the people behind the Broad Street Global Fund, alleging they ran the billion-dollar operation in "Ponzi-like fashion" while pocketing over $305 million in fees.

Their consolidated complaint, filed October 20, 2026 in federal court in Miami, alleges the operators of the private equity fund ran it in "Ponzi-like fashion" - raising more than $1 billion from investors, skimming roughly a third off the top as fees, and then trying to dump everyone into restricted stock of an offshore company instead of returning their cash.

The lawsuit names two corporate entities - Broad Street Global Management LLC and Broadstreet Inc. - along with four individuals: the CEO of Broadstreet Inc., the company's president and chief operating officer (two brothers who the complaint says managed the fund), and a senior managing director. The plaintiffs say they invested a combined $42.2 million.

Here is what the complaint alleges.

The fund promised fixed annual returns - anywhere from 7% to 28% depending on which investment series an investor chose. Infrastructure development, crypto mining, merchant cash advances, hotels, self-storage. The pitch was attractive: steady income, backed by real assets.

But according to the filing, approximately 30% of every dollar raised - roughly $305.4 million in total - was immediately taken as upfront fees. The complaint alleges those fees were funneled to the fund's operators, who used the money for "multiple homes, yachts, an aviation company and maintaining a private jet."

The complaint breaks that down: the CEO allegedly received more than $46 million from fund assets through entities he controlled; the president allegedly received more than $68.2 million; and the COO allegedly received more than $56.7 million.

Meanwhile, the filing alleges, the distributions investors were receiving did not actually come from the investments they had chosen. Instead, the complaint says, "as much as 80%" of those distributions were being funded by withdrawals from the fund's merchant cash advance portfolio - regardless of what series an investor had selected.

When the MCA portfolio ran dry in 2025 - showing what the filing calls "a money-in versus money-out loss of approximately $40 million" - the distributions could no longer continue, according to the complaint.

That is when the fund allegedly moved to push investors out.

First, in March 2025, investors in the fund's altcoin mining series - who the complaint says had invested roughly $416 million - were asked to approve a deal to transfer their interests into restricted stock of Z Squared Inc., a company formed through a merger with a money-losing biotech firm. The fund told those investors the shares were worth $600 million, the complaint says. But the filing alleges Z Squared's own financial statements, filed August 13, 2026, recorded the mining fleet's net book value at approximately $11.3 million.

Then came the November 2025 redemption notice. The fund told all remaining investors it was going private. They could choose cash within 180 days (Choice A), or restricted stock in a Cayman Islands SPAC called Soulpower Acquisition Corp. worth three times their capital account (Choice B) - stock that could be locked up for as long as 42 months.

Most of the plaintiffs picked cash, the complaint says.

But on May 22, 2026 - five days before the cash was due - the fund told investors it would no longer honor the cash option and would instead hand out SOUL shares as an "in-kind" redemption, according to the filing.

According to the complaint, the fund also filed a separate declaratory judgment action seeking to force all investors to accept the restricted stock. The filing alleges that if granted, this would "prevent approximately $148 million in cash redemptions from flowing back to BSG Fund investors" while the fund's operators kept assets worth "over $500 million" - including hotels, auto dealerships, self-storage facilities, and infrastructure projects - for themselves.

A parallel SEC enforcement action against the same defendants has been pending since January 29, 2025 (SEC v. Feingold et al., Case No. 1:25-cv-20436-DPG, S.D. Fla.), and a court-appointed monitor has been overseeing the fund's operations since April 2025. The monitor's status reports - several of which the complaint cites - have provided much of the financial data underpinning the investors' claims. A separate class action (Siriani et al. v. Feingold et al., Case No. 9:26-cv-80119-DPG) is also pending, alleging the defendants took "over $150 million in funds and assets" from three other private equity funds.

The complaint also alleges the fund's management entity acted as an investment advisor without being registered with the SEC - meaning, if proven, the entity owed its investors a fiduciary duty it never disclosed.

One of the individual defendants, a senior managing director, was suspended by FINRA for 12 months in August 2018 for "allegedly engaging in quantitively unsuitable trading in the accounts of customers" and has eight customer disputes on his BrokerCheck record, according to the complaint. The filing also alleges this individual routinely brought in investors who did not meet accredited-investor requirements, prepopulating their financial forms and telling them to "ignore" the inaccuracies.

The 15-count complaint includes federal securities fraud under Rule 10b-5, breach of fiduciary duty, fraud, civil theft, and conversion, among other claims. The plaintiffs are seeking at least $42 million in compensatory damages, along with punitive damages, treble damages under Florida law, return of fees, and the appointment of a receiver to oversee the fund's dissolution.

The allegations in this complaint have not been tested, and no court has ruled on the merits.