Earlier this week, the SEC won a court-ordered asset freeze of two former brokers, James Brennan III and Douglas Dyer, and their company Broad Street Ventures. The former brokers, both of whom have disciplinary histories with FINRA and state regulators, allegedly raised more than $5 million from investors by selling purported shares in eight similarly named companies.
According to the SEC, Brennan and Dyer not only neglected to register the stocks as promised, but they also transferred investor funds into their personal accounts or those belonging to their wives. The SEC further alleges that, despite not being registered to sell investments as brokers since the late 1990s, the two former brokers have solicited investors while claiming their securities industry experience.
The SEC claims that Brennan, Dyer and their company have violated Section 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. To this end, the SEC is seeking permanent injunctions as well as restitution for the ill-gotten gains with additional interest and penalties. It is also pursuing penny stock and officer-and-director bars against Brennan and Dyer.
Because securities fraud typically requires extensive government investigations and the analysis of complicated facts, the penalties associated with this crime are often significant. Guilty parties may be fined, incarcerated, put on probation and/or required to make restitution.
Jacko Law Group, PC assists financial firms in developing internal controls to detect and prevent securities fraud before it occurs. For more information, please contact one of our securities attorneys at 619.298.2880 or email@example.com.