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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 Release No. 49485 / March 26, 2004

ADMINISTRATIVE PROCEEDING File No. 3-11441


In the Matter of

THOMAS G. BROOKS,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE
PROCEEDINGS PURSUANT TO SECTION 15(b
OF THE SECURITIES EXCHANGE ACT OF
1934, MAKING FINDINGS, AND IMPOSING
REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Thomas G. Brooks ("Respondent" or "Brooks").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.4 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Brooks, age 38, is a resident of Eden Prairie, Minnesota. From January 3, 1999 to October 3, 2001, Brooks was the manager of the stock loan department at MJK Clearing, Inc. ("MJK"), a subsidiary of Stockwalk Group, Inc. ("Stockwalk") and vice-president of MJK.

2. From 1993 to October 3, 2001, Brooks was a registered representative for a broker-dealer registered with the Commission as a broker-dealer.

3. On June 3, 2003, the Commission filed a Complaint in the United States District Court for the District of Minnesota against Brooks, SEC v. Thomas G. Brooks, Case No. CV 03-3319 RHK/AJB. The Commission's Complaint alleged that between at least July 2001 through September 2001, Brooks failed to collect funds owed to MJK for stock loan transactions which caused MJK to lose millions of dollars and failed to disclose MJK's true financial condition to other broker-dealers doing business with MJK. During this same time period, the Complaint alleged that Brooks aided and abetted MJK's violations of the customer reserve and recordkeeping requirements.

4. On December 23, 2003, in SEC v. Thomas G. Brooks, an order of permanent injunction was entered by consent against Brooks, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 15(c)(3), and 17(a) of the Exchange Act and Rules 10b-5, 15c3-3, 17a-3, and 17a-5 thereunder. Brooks, without admitting or denying the allegations made in the Commission's Complaint, consented to the entry of the order of permanent injunction.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Brooks' Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Brooks be, and hereby is barred from association with any broker or dealer;

Any reapplication for association by the Respondent Brooks will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent Brooks, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

For the Commission, by its Secretary, pursuant to delegated authority,

Jonathan G. Katz
Secretary

 

http://www.sec.gov/litigation/admin/34-49485.htm


Modified: 03/26/2004