A recently filed lawsuit accuses San Antonio-area financial advisor and radio host Brooklynn Chandler Willy and others of orchestrating a scheme to lure clients into risky, unregistered investments in violation of state securities law.
The suit, filed last week in Bexar County District Court by two of Willy’s former clients, also alleges the advisor and her firm Queen B Advisors LLC — which does business as Texas Financial Advisory — breached their fiduciary duty and engaged in fraud.
An attorney for Willy denied the claims, labeling them “unfair.”
The legal action was first reported on by the Express-News, and it follows a suit the same plaintiffs filed in San Antonio federal court last month making similar allegations. The federal suit seeks class-action status.
Willy hosts financial advice shows that air on WOAI-AM and on KTSA AM and FM. She also runs a podcast and a YouTube channel focused on financial planning. Her Texas Financial Advisory firm maintains offices in both Stone Oak and New Braunfels, according to its website.
The Bexar County suit alleges Willy and others led the plaintiffs — sisters in their 60s and 70s — to put $750,000 of their retirement savings into investments offered by a company called Ferrum Capital LLC. The two women lost that investment and are seeking damages “to be made whole,” according to claims in the petition.
Ferrum and other parties are also named as defendants in the suit. The Current was unable to reach Ferrum officials for comment by press time.
“All of the defendants knew that the plaintiffs’ investments would end up worthless — that was the point of the scam,” the petition states.
In a statement to the Current, Willy attorney Mark J. Barrera denied his client was part of an investment scheme. Further, he argued that the investments she sold to the plaintiffs are legitimate.
“These plaintiffs loaned money to Ferrum Capital, not Willy, on reasonable terms at 10% interest for four years,” Barrera said. “The promissory notes they signed with Ferrum Capital are valid and enforceable, but they have not yet matured. The plaintiffs are demanding their loans to be repaid early, before they have come due.”
Even so, Willy has faced past penalties from state securities regulators over her dealings.
In 2020, she agreed to a one-year suspension of her state license as a securities dealer for selling alternative investments without being registered to do so, according to the Texas State Securities Board.
As part of that action, she also was required to pay back some $2.8 million in commissions. Further, she agreed that she and her firm would give up having discretionary trading authority over clients’ accounts and not recommend alternative investments for a five-year period.
In the recent Bexar County lawsuit, the plaintiffs allege Ferrum and its managers produced marketing materials that appeared to guarantee a 10% annual return on investments in its debt over a four-year period. However, none of the notes sold to clients were registered with state or federal securities regulators, the petition alleges.
In turn Willy and Queen B had a deal with the firm under which they received an 8% commission for each investor lured to its investments, the suit states.
From 2018 to 2019, Willy and Queen B recommended at least 249 people put $45.1 million into the Ferrum notes, the lawsuit states. The advisor and her firm received roughly $2.7 million in undisclosed commissions, according to the allegations in the petition.
“A guaranteed ten percent annual return on an investment seems too good to be true — that’s because it is,” the suit states. “The defendants in this case conspired to form and operate an investment scheme to defraud the plaintiffs and the general public by promoting on radio and television guaranteed profits on investor funds. What they didn’t tell these potential investors was that only the defendants themselves would see any of that guaranteed profit.”
In his statement, Willy attorney Barrera said the lawsuit fails to mention that the advisor returned her entire commission to the plaintiffs last year when they ended their relationship with her firm.