Retirees sue Broad Street fund over Dogecoin mining investment
Retirees file lawsuit over Dogecoin mining fund
Paula and Stephen Darby, both 77, filed a civil complaint in Miami federal court on September 4, 2026. They sued Broad Street Global Management, BroadStreet, Inc., and the Baldassarra brothers, alleging the fund tried to take more than half a billion dollars from investors, including the Darbys’ roughly $1.4 million.
Key facts
- The Darbys seek a court‑appointed receiver for Broad Street Global Fund and dissolution of its assets.
- Broad Street’s crypto‑mining division raised about $199 million by promising 28 % annual returns.
- Z Squared’s Dogecoin mining fleet, valued at $660 million in a merger, actually generated a $13.8 million loss in Q2 2026.
- The SEC sued Broad Street and its managers in January 2025, alleging more than $1 billion was collected from over 1,000 investors.
SEC enforcement and fund background
In January 2025 the U.S. Securities and Exchange Commission filed a case against Broad Street and its managers, claiming the group raised over $1 billion from investors. A court‑appointed monitor has overseen the company since April 2025. The fund promised investors income from hotels, custom homes and a South Carolina resort, while its crypto‑mining arm attracted $199 million with a 28 % return claim.
Z Squared’s mining fleet performance
In April 2026 a blank‑check company merged with Broad Street’s mining assets, creating the publicly traded Z Squared (NASDAQ: ZSQR). The merger valued the 9,800‑machine fleet at $660 million, assuming all were high‑end Bitmain L9 units. In reality, 8,228 machines were lower‑spec L7 units. The company recorded $12.4 million in equipment cost and a net book value of $11.3 million at quarter end. Revenue in Q2 2026 was $1.6 million, 88 % from Dogecoin, but cost of revenue was 211 % of that amount, leading to a net loss of $13.8 million.
Darby lawsuit details
The Darbys chose a cash payout in Broad Street’s November 2025 redemption notice, which was due on May 27, 2026. They claim the fund later switched their payout to stock of a Cayman acquisition company, prompting the lawsuit to recover the cash they expected.
Current status and next steps
The lawsuit is pending in Miami federal court. The SEC enforcement action against Broad Street continues, and Z Squared’s latest filing notes that the entity that supplied its mining fleet is a named defendant in the SEC case.
