On June 2, 2020, the DOJ indicted Smith in the same court. According to documents filed in this case and statements made in court, from February 2016 through August 2019, she orchestrated a scheme in which she made misrepresentations to investors and promised she would invest their funds in particular trading strategies that Broad Reach Capital was allegedly optimally situated to execute.
Smith distributed written materials about Broad Reach Capital to investors and prospective investors that included purported historical performance information, including claimed annual returns of over 33% in 2017 and positive monthly returns in 2018, DOJ alleged.
In reality, the total cash and securities in the Broad Reach Capital bank and brokerage accounts decreased from about December 2016 through June 2019, according to DOJ.
To induce investors to continue investing, Smith provided them with monthly account statements that falsely showed their investments were…