On Nov. 28, an administrative law judge for the SEC barred Twin Cities
stockbroker Sherwin Brown from the securities industry, according to a
Nov. 29 article by Star Tribune. The order followed a similar ruling made
last May by a federal judge, which also barred Brown from the securities
industry and ordered him to pay over $1.5 million in assets, prejudgment
interest, and civil penalties. Brown is in the process of appealing the
Brown, an immigrant from Jamaica, became a stockbroker in the Minneapolis-St.
Paul area in 1988, and founded Jamerica Financial, Inc. four years later.
According to the article, he is currently under investigation by the SEC
for activities related to a side business he organized in May of 2004
called Brawta Ventures.
Fifty-three investors put $1.62 million into Brown's new business.
In 2006, the SEC filed a lawsuit against Brown, in which he was accused
of engaging in a pattern of securities fraud. Specifically, the SEC alleged
that Brown, through Brawta Ventures, misappropriated $869,644 of investor
funds and used the money for personal purposes.
The article did not say that any of Brown's clients had filed complaints
against him or his companies. In fact, according to the Star Tribune article,
Carol Fox Foelak, the administrative law judge who issued Monday's
order, admitted that Brown's clients were satisfied with his services.
"While Brown has had satisfied clients, the public interest determination
extends beyond consideration of the particular investors affected by a
respondent's conduct to the public-at-large, the welfare of investors
as a class, and standards of conduct in the securities business generally,"
Brown disputes the allegations made against him by the SEC. In addition,
as reported in the article, although Brown became the subject of a federal
grand jury investigation in Minnesota in 2007, he has not yet been charged
with any crimes. He now lives with his family in Florida.