August 17, 2026  ·  Complaint filed August 16, 2026  ·  United States District Court for the Southern District of Florida, No. 1:26-cv-25543

Newman News, By David Brunk

Read the complaint

AAYU Health Sues Broad Street for $500M Fee Skimming and Forced Stock Redemption

Upfront 30% Fees Allegedly Siphoned Off Before Investments Deployed

The complaint alleges Broad Street Global Management LLC and its affiliates took 30% upfront fees—totaling $300 million—from more than $1 billion raised from investors, then commingled the funds in BSG Management accounts. Of this, investors deposited $868 million in BSG Fund’s bank accounts, while $199 million was deposited in BSG CM Series’ bank accounts (Compl. ¶30). The complaint further alleges that approximately $880 million was transferred or deposited into BSG Management’s bank accounts, where the funds were commingled (Compl. ¶31). The fees were allegedly used for personal luxuries, including yachts and homes, while monthly investor reports omitted the deductions, making it appear all capital was invested. The complaint states that Broadstreet counsel represented a buyout/redemption value of $3,700,000,000 on December 3, 2025 (Compl. context from timeline).

A subsequent enforcement action later confirmed the 30% fee structure, the complaint states. BSG Management, controlled by Joseph and Steven Baldassarra, received approximately $9 million directly from investors and more than $871 million from BSG Fund and BSG CM Series accounts, the filing alleges (Compl. ¶17). The complaint also notes that the total claimed sales price of two exit transactions was $3,600,000,000, with a claimed profit of $2.4 billion from these transactions (Compl. context from amounts section). The complaint alleges that the $300 million in upfront fees represented 30% of the over $1 billion raised from investors (Compl. context from amounts section).

“Broadstreet ran the BSG Fund in Ponzi-like fashion, using new investor money to pay old investors,” the complaint alleges (Compl. ¶3). The filing cites internal documents reviewed by key principals, which allegedly showed MCA portfolios were insufficient to cover investor obligations. The complaint alleges that Broadstreet collected 30% in upfront fees it was not entitled to, as outlined in Count IX (Compl. ¶29). The complaint further states that the total gross revenue of the 23 infrastructure projects was $2,253,806,014, with a total gross revenue (pre-expenses) for these projects amounting to $2.25 billion (Compl. context from amounts section). The complaint also notes that the claimed value of Z Squared shares in Broadstreet investor updates was $600,000,000 (Compl. context from amounts section).

Forced Stock Redemption Scheme Allegedly Switched Cash-Electing Investors to Overvalued Shares

In November 2025, Broadstreet sent a redemption notice to investors offering a choice between cash or stock in Soulpower Acquisition Corp. (SOUL). By May 2026, Broadstreet informed investors it would not honor cash redemption selections, offering "in-kind" stock instead, the filing alleges. The complaint asserts that this conduct forms the basis for Count I: Breach of Contract (The Redemption Notice) and Count II: Breach of Contract (The “In-Kind” Redemption) against the defendants (Compl. ¶¶8, 230, 236). The June 2, 2026 Monitor’s Seventh Status Report indicated an approximate redemption obligation of $2,000,000,000 for the BSG Fund (Compl. context from amounts section).

AAYU Health LLC, which invested across multiple BSG Fund series, selected cash redemption but was forced into restricted SOUL stock five days before the payment deadline, the complaint states. The filing alleges that this unilateral switch constitutes conversion under Count III and civil theft under Florida Statute § 772.11, as outlined in Count IV (Compl. ¶8, ¶242, ¶248). Meanwhile, the filing alleges Broadstreet retained a significant portion of infrastructure projects and other assets valued at $518,100,000, representing 70% of the infrastructure assets (Compl. context from amounts section). The complaint also notes that 30% of the BSG Fund infrastructure assets, calculated as 0.30 × ($239,000,000 + $144,000,000), amounted to $114,900,000 (Compl. context from amounts section).

“Broadstreet is keeping hotels, auto dealerships, self-storage facilities, 70% of the infrastructure projects, and other assets,” the complaint alleges (Compl. ¶7). The filing claims Broadstreet overvalued SOUL and ZSQR stock at $3.6 billion, with “absolutely nothing that supports that valuation” (Compl. ¶2). The complaint states that Broadstreet used $500 million of investor assets to acquire the remaining assets it kept (Compl. context from amounts section). ZSQR shares, which Broadstreet claimed were worth $600,000,000 in investor updates, traded at approximately $200,000,000 based on a $4.81 closing price on July 27, 2026, the complaint states (Compl. ¶213). The assets being transferred to SWB Holdings/Soulpower Acquisition Corp. were valued at a low end of $487,000,000, with a high end of multiple billion dollars (Compl. context from amounts section). The complaint also alleges that Broadstreet is attempting to steal over half a billion dollars from investors, including Plaintiff’s investments in BSG Fund (Compl. ¶1).

Altcoin Series Fraud Allegedly Diverted Investor Capital to Fees and Distributions

The complaint alleges Broadstreet raised $416,000,000 for its Altcoin Mining Series, promising 28% annual returns, but diverted 30% to fees and paid distributions, leaving only 42% ($174,720,000) for actual investments. The Altcoin assets, consisting of 16,000 machines, were generating only 5% annual returns by 2025, requiring a 360–470% return to fulfill repayment promises, the filing states. The complaint asserts that the current value of the Altcoin investment would need to be between $624,000,000 and $832,000,000 to meet the repayment obligations (Compl. ¶209). The estimated total cost of the altcoin machines ranged from $160,000,000 to $320,000,000, based on a per-machine cost of $10,000 to $20,000 (Compl. ¶217).

Broadstreet presented Altcoin investors with a vote to transfer their stakes into ZSQR stock. The filing cites internal documents reviewed by key principals, which allegedly showed MCA portfolios were insufficient to cover investor obligations. The complaint alleges that this conduct forms the basis for Count V: Breach of Contract (Altcoin) and Count VI: Fraud (Altcoin) against the defendants (Compl. ¶¶6, 254, 260). The total claimed value of the infrastructure assets sale was $3,000,000,000 (Compl. context from amounts section).

“Broadstreet fraudulently induced its Altcoin investors to agree to transfer their ownership interest in the Altcoin Series,” the complaint alleges (Compl. ¶6). By April 2026, Altcoin investors were redeemed via ZSQR stock, while Broadstreet received 41,521,276 shares, the filing states. The complaint further alleges that Akhil Morada, a Senior Managing Director of Broadstreet, held 2,219,691 shares of Z Squared stock, representing 4.3% of the outstanding shares (Compl. ¶211). The complaint also notes that the total gross revenue of the 23 infrastructure projects was $2,253,806,014 (Compl. context from amounts section). The complaint states that the amount remaining for Altcoin investment after fees and distributions was $174,720,000, which represents 42% of the $416,000,000 raised (Compl. ¶209).

Breach of Fiduciary Duty Claims Target Baldassarras as Investment Advisers

The complaint alleges Joseph and Steven Baldassarra, as managing members of BSG Management, acted as investment advisers under the Investment Advisers Act § 202(a)(11) (15 U.S.C. § 80b-2(a)(11)) and owed fiduciary duties of care and loyalty to BSG Fund investors (Compl. ¶120, ¶125). The filing claims they failed to disclose conflicts of interest, including ownership stakes in affiliated development companies, which allegedly paid fees to entities under their control. The complaint asserts that this conduct forms the basis for Count VIII: Breach of Fiduciary Duty against BSG Management, BSI, Steven Baldassarra, Joseph Baldassarra, and Akhil Morada (Compl. ¶272). The complaint also alleges that Feingold and the Baldassarras took $170 million from the BSG Fund for personal use (Compl. context from amounts section).

BSG Management received more than $871 million from BSG Fund accounts, the complaint states. As of Q2 2025, the approximate balance of investors’ capital accounts across all Series (excluding Altcoin, MCA, QSBS, and TCVI) was $633,000,000 (Compl. ¶228). The total appraised value of the 23 infrastructure projects included in the SOUL transaction was $76,675,000, while 30% of the BSG Fund infrastructure assets amounted to $114,900,000 (Compl. context from amounts section).

“Investors lack influence over BSG Fund management and are dependent on the principals,” the complaint alleges (Compl. ¶38). The filing claims the defendants breached their fiduciary duties by failing to ensure financials reflected actual profits and by approving distributions despite knowing MCA portfolios were insufficient. The complaint further alleges that the Baldassarra brothers, as control persons, are liable under Section 20(a) of the Exchange Act, forming the basis for Count XI (Compl. ¶284). The complaint also states that the claimed profit from the exit transactions was $2.4 billion (Compl. context from amounts section). The complaint quotes the Offering Documents as stating, “has been established to pursue multiple investment objectives and investment strategies in different Series so investors can select the investment objectives and investment strategies to which the investor wishes to have exposure” (Compl. ¶54).

Investor Funds Allegedly Misallocated Across Series Despite Promised Strategies

The complaint details how Broadstreet raised capital for multiple investment series, each with distinct strategies and targeted returns. Despite these distinct strategies, the complaint alleges that Broadstreet misallocated funds across series, using new investor money to pay distributions to earlier investors, consistent with a Ponzi-like scheme.

The complaint further alleges that monthly investor reports misled investors about the source of distributions and the allocation of their funds (Compl. ¶4). The filing states that up to 80% of distributions were funded by the MCA Series, regardless of the investor’s chosen series (Compl. ¶174). The complaint alleges that Broadstreet’s practice of commingling funds and misallocating distributions breached its contractual obligations to investors and constituted fraud.

The complaint quotes the Offering Documents as stating, “[a] Series may vary from other Series due to, investment objectives, investment strategies, risk, leverage, liquidity, and other factors” (Compl. ¶54). However, the complaint alleges that Broadstreet did not adhere to these distinct strategies, instead using funds interchangeably across series to sustain distributions. The complaint also alleges that Broadstreet knowingly accepted non-accredited investors, with Akhil Morada and Joseph Baldassarra assuring investors of their eligibility despite financial ineligibility (Compl. ¶92–¶95, ¶97–¶98).

Claims Seek Disgorgement of Fees, Accounting of Funds, and Equitable Relief

The complaint seeks disgorgement of excess fees collected by Broadstreet under Count IX and an accounting of BSG Fund’s books and records under Count X (Compl. ¶¶278, 281). The filing also asserts Count VII: Fraud against the defendants, alleging misrepresentations regarding the value of redemption options and the allocation of investor funds (Compl. ¶266). The complaint notes that the buyout/redemption value represented by Broadstreet counsel on December 3, 2025, was $3,700,000,000 (Compl. context from amounts section). The complaint further seeks the imposition of a constructive trust, equitable lien, and/or segregation of sale proceeds under Count XII to prevent further dissipation of investor assets (Compl. ¶290). The complaint states that SWB Holdings held $250 million in cash (Compl. context from amounts section).

The filing cites the roles of Joseph and Steven Baldassarra as managing members of BSG Management and officers of Broadstreet Inc., as well as their review and approval of offering documents and investor updates. The complaint alleges that the defendants’ conduct resulted in significant losses for investors, including the $170 million allegedly taken from the BSG Fund by Feingold and the Baldassarras (Compl. context from amounts section). The complaint also notes that the total fees and commissions paid to Feingold, the Baldassarras, and BSG Holdings amounted to $305.4 million, representing 30% of the over $1 billion raised (Compl. ¶119).

“This is theft in broad daylight,” the complaint alleges (Compl. ¶2). The filing also quotes the complaint as stating, “Effectively taking away the right to control their own investment decisions that Broadstreet claims each investor has pursuant to the Compliance Acknowledgement Update” (Compl. ¶8). Additionally, the complaint alleges that Broadstreet’s actions forced investors into unsuitable investments, stating, “Broadstreet is forcing Plaintiff, and presumably other BSG Fund investors, into an unsuitable investment that is expressly contrary to Plaintiff’s investment objectives” (Compl. ¶9). The complaint further quotes the Compliance Acknowledgement Update, which states, “I have been aware of and continue to consent to the fees and costs associated with my investment... including but not limited to fees of up to six percent per year for five years...” (Compl. ¶154).

The complaint also alleges that the Compliance Acknowledgement Update contained contradictory statements, including: “I make my own investment decisions, neither Broadstreet nor any of its affiliates act as an investment advisor” (Paragraph 12) and “I understand that the real estate development projects are not designed to immediately generate cash flow...” (Paragraph 7) (Compl. ¶163). The complaint argues that these statements conflict with the reality that Broadstreet exercised discretionary control over investor funds, as outlined in Paragraph 8 of the same document: “I am aware that until the infrastructure and other real estate investments generate significant cash flow, my investment may be used to generate profits elsewhere...” (Compl. ¶163).

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.