Paula and Stephen Darby, both 77 years old, filed suit against Broad Street Global Management and its managers in Miami federal court on September 4, alleging the fund is attempting to misappropriate over half a billion dollars from investors, including the Darbys' approximately $1,415,373 investment.
The complaint centers on Broad Street's alleged transfer of investor funds into Z Squared, a Nasdaq-listed Dogecoin mining company. Z Squared common stock (ticker: ZSQR) has declined 76% over the past 12 months. The Darbys are seeking appointment of a receiver over Broad Street Global Fund and dissolution of its assets.
SEC Enforcement and Fund Background
In January 2025, the Securities and Exchange Commission sued Broad Street Global Management, alleging the group raised more than $1 billion from over 1,000 investors. The fund's cryptocurrency mining division collected approximately $199 million while promoting annual returns of 28%.
A court-appointed monitor has overseen the company since April 2025, following the SEC enforcement action. The SEC enforcement proceedings remain ongoing.
Z Squared Mining Operations
In April 2026, a blank check holding company merger brought Broad Street's Dogecoin mining fleet into the publicly traded Z Squared. Broad Street received approximately 81% of the combined company's shares at closing.
A valuation firm assigned the 9,800-machine fleet a value of $660 million, though this assumed all machines were flagship models. In reality, 8,228 machines were lower-specification L7 units. The company's own books valued the fleet at $12.4 million initially and $11.3 million at quarter end.
In the second quarter of 2026, the mining fleet generated $1.6 million in revenue, with costs of revenue running to 211% of that revenue. The company posted a quarterly net loss of $13.8 million, with mining costs exceeding mining revenue before accounting for depreciation.
Redemption Dispute
Broad Street's November 2025 redemption notice offered investors cash within 180 days or stock in a Cayman acquisition company. The Darbys selected the cash option, with payment due May 27, 2026. According to their complaint, Broad Street changed their selection to Cayman company stock five days before the deadline. The lawsuit seeks to recover the promised cash payment.
