Erez Law, a reputable legal firm with a track record of successfully representing investors in similar cases, is currently investigating brokers and advisors nationwide who recommended their clients invest in limited partnership interests in Broad Street Global Fund (BSG Fund), a private equity fund. If you have suffered investment losses, we are interested in speaking with you to explore your options for compensation. Erez Law is interested in speaking with victims of investment-related misconduct related to investments in the BSG Fund.
The Securities and Exchange Commission (SEC) has taken significant steps to address the issue. They recently filed a federal lawsuit in the Southern District of Florida against private equity firm Broadstreet Inc. and Florida attorney David Feingold, Joseph Baldassarra (CRD# 3045422), and Steven Baldassarra (CRD# 3138582), and entities Broad Street Global Management, LLC and Broad Street Inc., for operating the alleged massive, multi-year investment fraud. The Baldassarra brothers are the managing members of BSG Management, and BSG Management acts through the brothers. The lawsuit accuses them of misrepresenting the BSG Fund’s offering, incorrectly informing investors they could invest in high-yield offerings. BSG Management is not registered as an investment adviser with the SEC, however, it acts as an investment adviser with respect to BSG Fund.
The SEC alleges that executives secured more than $1 billion from over one thousand investors by using “deceptive schemes and materially false statements to raise money from investors.” It further alleges that of the more than $1 billion that Defendants have raised, BSG Management has received approximately $9 million directly from investors and more than $871 million from the bank accounts of BSG Fund and BSG Series CM, LLC’s bank accounts.
Between October 2020 and May 2022, BSG Management used an internal sales staff to offer and sell BSG Fund LLC units. From June 2022 through October 2024, BSG Management and BSI used an internal sales staff comprised of BSI personnel to offer and sell BSG Fund LLC units.
The BSG Fund consists of several Series, with BSG Management serving as the investment adviser. These Series cover a range of sectors, including Real Estate Infrastructure, Merchant Cash Advances, Custom Home Building, Hotel Projects, and other specialized areas, each with distinct investment opportunities and its own potential returns and associated risks. According to the lawsuit, “The defendants fraudulently offered and paid inflated returns to investors in at least two major Series, claiming that investments in Merchant Cash Advances – short term and fast funding transactions to small business – generated significant profits when in fact they did not. As a result, Defendants paid millions of dollars in returns to investors that were not supported by actual MCA profits.”
The defendants allegedly managed the BSG Fund in ways that contradicted their representations to investors, significantly increasing the risks to those investors. They had promised that the fund would follow specific structures and practices to safeguard investments. The issuers also assured investors that the assets and liabilities of each Series would be kept separate, with no commingling of funds or cross-liabilities between Series, and that the Fund would directly own the investments made with investor funds. However, according to the SEC, funds were combined across BSG Fund’s various offerings despite assuring investors that they would keep their money in separate accounts. Furthermore, nearly all investor funds were reportedly diverted to accounts and assets controlled by BSG Management, the Baldassarras, or BSI. The complaint further claims that BSG Fund ultimately diverted more than $170 million of investor funds into entities controlled by the defendants.
The SEC claims that the Baldassarras and BSG Management deceived investors and made a series of false and misleading statements to persuade investors to invest in the Fund. Specifically, they allegedly misled investors by promising that a Series related to Qualified Small Business Stock would deliver tax-free returns, despite the funds not being invested in tax-exempt assets, which led to unforeseen IRS liabilities for the investors. Additionally, they reportedly provided false information regarding the BSG Fund’s recordkeeping practices and financial statements.
The SEC also asserts that the defendants violated their obligations to investors by acting as unregistered investment advisers and failing to disclose conflicts of interest. Additionally, the complaint alleges that the defendants made false statements regarding their recordkeeping practices.
The SEC is seeking an expedited ruling on this motion seeking temporary and preliminary measures, such as freezing assets, issuing injunctions, and appointing a receiver, to halt the alleged misconduct.
Broad Street Global Fund Investment Loss Options
At Erez Law, we understand the complexities of investment fraud cases and the various options available for recovering your losses. We can help you navigate these options and guide you toward the best course of action for your specific situation. If you’re an investor in BSG Fund who purchased BSG Fund limited partnership interests and want to explore your options, reach out to the attorneys at Erez Law.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses its customers suffer.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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