A San Antonio-based investment advisor, Brooklynn Willy, has been arrested on charges of obstructing an official investigation into alleged investor fraud.
Willy, the owner of Queen B Advisors, operating as Texas Financial Advisory, faces charges of obstructing an official proceeding, making false statements, and aggravated identity theft.
Alleged Investment Fraud Scheme
The investigation dates back to May 2021, when Willy allegedly convinced a married couple, clients of her advisory firm, to invest $500,000 in an external company. According to the Justice Department, another entity under Willy’s control, Chandler Capital Holdings, acted as the agent for the transaction, handling contracts and paperwork.
The couple provided a $500,000 check intended for the investment. However, federal prosecutors allege Willy diverted the funds for personal expenses, including credit card payments, as well as payments to other investors and businesses she controlled.
Court documents reveal the investment was structured into two promissory notes of $250,000 each. One note had a one-year term, and the other carried a three-year term, both promising a 12% annual return. Despite the promised investment terms, the Justice Department claims the funds were never deployed as described.
Criminal Charges and Investigation
The current charges stem from allegations that Willy attempted to mislead federal investigators by presenting a falsified loan document and making false statements during the ongoing probe. The FBI and IRS are still investigating whether her actions constitute securities fraud.
Willy’s attorney has not issued a public response to the charges.
Regulatory History
Willy’s advisory firm, Texas Financial Advisory, reported managing approximately $118 million across 633 client accounts, according to its most recent Form ADV filing with the Securities and Exchange Commission (SEC).
This isn’t Willy’s first encounter with regulatory trouble. In 2019, her former employer, J.W. Cole Advisors, terminated her employment for violating firm policies related to unauthorized private securities transactions. The following year, Texas regulators suspended her registration for one year and imposed a $2.8 million fine related to the improper sale of alternative investments.
Implications for Wealth Advisors
The case underscores the importance of regulatory compliance and transparency in managing client investments. Advisors must adhere to industry regulations, especially when recommending private investments or alternative securities. Wealth advisors should ensure that all investment transactions are properly disclosed, documented, and conducted through approved channels to avoid conflicts of interest or accusations of misconduct.
As the investigation continues, the charges against Willy serve as a cautionary tale about the severe consequences of failing to meet fiduciary and legal responsibilities. Wealth advisors should take proactive steps to strengthen compliance protocols and build client trust through transparency and accountability.
