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SEC Charges Adviser's Estate and Firm in Alleged $1.68 Million Client Fund Misappropriation Scheme

Posted on April 30th, 2026 at 12:14 PM
SEC Charges Adviser's Estate and Firm in Alleged $1.68 Million Client Fund Misappropriation Scheme

From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï

The Securities and Exchange Commission has filed a civil enforcement action against the estate of former investment adviser John R. Brodacki, III and his firm, Castle Hill Financial Group, LLC, alleging a years-long scheme that breached fiduciary duties and diverted client funds for personal use.

According to the SEC's complaint, Brodacki and Castle Hill solicited and obtained approximately $1.68 million from at least 18 advisory clients between June 2018 and September 2025. The agency alleges that many of these clients were elderly, retired, or seriously ill. Brodacki represented that the funds would be invested for the benefit of the clients or their family members.

The complaint asserts that Brodacki failed to invest the funds as promised. Instead, he allegedly redirected client money to cover personal and business expenses, including luxury dining, social club memberships, tuition, and travel. The SEC also alleges that he used client funds to make payments to other clients and to members of his own family.

The SEC further alleges that Brodacki and Castle Hill continued to solicit and accept client funds even after the registered investment adviser with which they were affiliated terminated the relationship in July 2025. Brodacki died on or about March 23, 2026.

The SEC has charged Brodacki and Castle Hill with violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, which prohibit fraudulent conduct and impose fiduciary obligations on investment advisers. The agency seeks disgorgement with prejudgment interest from Brodacki's estate, as well as civil penalties and a permanent injunction against Castle Hill.

The allegations remain unproven, and the litigation will determine the outcome of the SEC's claims.

ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec enforcement, securities fraud, investment adviser misconduct, fund misappropriation, civil enforcement action

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