The U.S. Securities and Exchange Commission is accusing Leroy Brown Jr. of Texas securities fraud. Brown, a U.S. army veteran, allegedly solicited ex- and current members of the military and others to invest with him and his firm LB Stocks and Trades Advice.
Among his purported wrongdoings are presenting his firm as SEC- and Financial Industry Regulatory Authority-registered, when it is neither, touting himself as holding all securities licenses, which he does not, and creating a bogus sense of success and legitimacy via numerous misrepresentations to get people to invest. Brown also allegedly persuaded investors to buy $1,000 membership certificates in the firm’s stocks to get involved in purported investments in undeveloped real estate that were purportedly “guaranteed” to double or even triple their money. Instead, said the SEC, he took investors’ funds and placed the cash in his own accounts. The Commission believes the Texas securities scam has gone on for about sixteen months.
This type of fraud targets members of an identifiable group. Often, the fraudster will be a group member or have some other affiliation. Affinity scams take advantage of the friendship and trust in the group, with members persuaded in part to invest because of the “trusted” connection.
Our Houston securities fraud law firm represents individuals and institutions that have been the victim of a Texas financial scam.
Ways to Avoid Affinity Fraud:
• Do your due diligence even if you know or trust the person with the investment opportunity • Watch out for investments promising guaranteed or amazing returns • Make sure that you agree to any investment opportunity in writing
Contact Shepherd Smith Edwards and Kantas, LLP today.
The SEC Complaint (PDF)
More Blog Posts:
Texas Securities Scam Allegedly Bilked Investors of $4.4M, Stockbroker Fraud Blog, April 18, 2015
Securities Class Action Says ARCP Made Over $900M From Acquisition Binge, Institutional Investor Securities Blog, April 20, 2015
Another Institutional Investor Fraud Lawsuit Accuses American Realty Capital Properties Of Violating Securities Laws, Institutional Investor Securities Blog, January 26, 2015