November 19, 2018

L.A. Venture Capitalist, Philanthropist Under Scrutiny by SEC

Venture capitalist Elliott Broidy, a major donor and activist in the Los Angeles Jewish community and a leading investor in the Israeli economy, is under scrutiny in a current U.S. Securities and Exchange Commission investigation, according to a report in The Wall Street Journal.

The investigation revolves around allegations that some investment firms made improper payments to secure lucrative business from public pension funds, particularly from the New York State Common Retirement Fund.

Broidy has not been charged with any wrongdoing, but is being questioned by SEC for “possible violations” of federal security laws, The Wall Street Journal reported.

The federal agency said that Broidy repeatedly failed to respond to requests and subpoenas for bank and other records, and failed to appear for scheduled testimonies.

However, at a court hearing Sept. 30 in Los Angeles, U.S. District Judge Stephen Wilson showed little sympathy for the SEC position, according to a transcript of the hearing.

Wilson commented that SEC was “misusing the procedure,” and “what it comes down to is a minor scheduling dispute of a couple of weeks.” Lawyers for both sides agreed to meet Oct. 22.

Broidy, 51, was not available for comment, but Jim McCarthy, his New York-based spokesman, told The Jewish Journal that Broidy and his staff had so far reviewed 100,000 pages of financial records and submitted 40,000 pages.

The Israeli media has sometimes labeled Broidy as a “mystery man” for his public reticence, but he spoke at length with The Jewish Journal about his business and personal lives in 2006.

By raising $800 million, Broidy made his Markstone Capital Group the largest private equity fund in Israel, at a time when the intifada was at its height and most investors shunned the Jewish state.

In Los Angeles, Broidy has been a major donor to the United Jewish Fund and Friends of the Israel Defense Forces, a trustee of USC and of USC Hillel, and has served on the Hebrew Union College-Jewish Institute of Religion board of governors and as a former trustee of Wilshire Boulevard Temple.

He is credited with revitalizing the dormant California-Israel Chamber of Commerce in the mid-’90s, together with Stanley Gold and Stanley Chais. Gold is president and CEO of Shamrock Holdings and outgoing president of The Jewish Federation of Greater Los Angeles.

Chais, a large contributor to Israeli and Jewish causes, faces three legal actions as an alleged “middleman” for Bernard Madoff.

At the time of the 2006 article, Broidy was highly lauded for his financial acumen and civic involvement by local rabbinic and business leaders.

Broidy has also been a heavy hitter among Republican supporters, serving as finance chairman of the Republican National Committee and among the top fundraisers for President George W. Bush in his 2004 campaign and for Sen. John McCain in his 2008 presidential race.