Investors accuse Broadstreet of draining billion-dollar fund

A family that put nearly $2 million of retirement savings into a private equity fund alleges its operators drained the operation and are now forcing investors into restricted stock they never signed up for.

The complaint, filed October 12, 2026, in the US District Court for the Southern District of Florida, targets Broad Street Global Management LLC, Broadstreet, Inc., and three individuals who the filing says controlled the fund. The case is Parbhoo et al. v. Feingold et al., Case No. 1:26-cv-27140.

The Broad Street Global Fund raised more than $1 billion from over a thousand investors, according to the filing. It promised annual returns ranging from 7% to 28% depending on the investment series. But the complaint alleges those returns did not come from the underlying investments. Instead, the filing says, money from the fund's merchant cash advance portfolio was used to pay investors across every series - no matter what they had actually chosen to invest in. At one point, the complaint alleges, "as much as 80% of those distributions" were funded this way. The filing describes this as the fund being run in "Ponzi-like fashion."

The three individual defendants are the fund's CEO and two brothers who served as its managing members. According to the complaint, those three collectively took more than $170 million from the fund - money the filing says was used to fund "a lavish lifestyle including purchasing multiple homes, yachts, an aviation company and maintaining a private jet."

On top of those payments, the filing alleges the fund immediately pocketed 30% of every dollar raised - more than $305 million in total - as upfront fees for five years of management services. Those fees never showed up on investor statements, according to the complaint. And the fund is now pushing investors out well before those five years of service have been delivered, the filing alleges.

The exit strategy came in two waves, according to the complaint.

First, in March 2025, investors in the fund's altcoin mining series were asked to convert their holdings into restricted shares of Z Squared Inc. (ZSQR), a company formed through a merger with a money-losing biotech firm. The complaint alleges that an appraisal valued the transferred mining machines at $660 million, but the valuation "had assumed the machines were all Antminer L9 systems when, in fact, 84% of the fleet were L7s - an older, less-powerful system." The company's own financial statements later recorded the fleet at approximately $12.4 million, the complaint says.

Then in November 2025, all remaining investors received a binding redemption notice with two options: cash within 180 days, or restricted stock in Soulpower Acquisition Corp. (SOUL), a Cayman Island SPAC, valued at three times their capital account. The plaintiffs chose cash.

Five days before the payment deadline, the fund pulled the offer, the complaint alleges. It informed investors it would no longer honor cash elections and would instead force everyone into SOUL stock - shares that could be locked up for as long as 42 months. According to the filing, approximately 687 investors had elected cash, representing about $148 million in redemption obligations. The fund allegedly needed approximately $2.45 billion in SOUL stock to redeem all investors, but only 30% of its infrastructure assets were being transferred to the SPAC. The filing alleges the operators are keeping the remaining 70% - along with hotels, auto dealerships, self-storage facilities, and other assets acquired with investor money - for themselves.

The complaint references a parallel SEC enforcement action against the same defendants, filed January 29, 2025, which resulted in the appointment of a court monitor. That monitor reported that from January through May 2025, approximately 79.7% of the fund's incoming money came from liquidating the merchant cash advance portfolio, according to the complaint. The monitor also reported that the fund's infrastructure development projects had generated only approximately $300,000 in realized profits through the end of 2024, the filing notes.

The filing describes the fund's management entity as not registered as an investment advisor with the SEC, despite acting as one and exercising control over how investor money was deployed.

The plaintiffs bring 13 counts including breach of contract, "civil theft" under Florida law, "fraud," "fraud in the inducement," breach of fiduciary duty, and federal securities violations. They are asking for compensatory and treble damages, rescission, an injunction to freeze fund assets, dissolution of the fund, and a court-appointed receiver.

The plaintiffs' retirement savings are tied up in the fund, and they allege they "have been forced to continue working longer than planned and have postponed their retirement" as a result.

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