U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20669 / August 1, 2008
Securities and Exchange Commission v. Brent S. Lemons (Civil Action No. 6:08-CV-308, United States District Court; Eastern District of Texas, Tyler Division)
SEC Charges Brent Lemons, Former Registered Representative From Tyler, Texas, With Fraud
The Securities and Exchange Commission ("Commission") today filed a civil action against Brent S. Lemons, a former registered representative from Tyler, Texas. The Commission's complaint, filed in the United States District Court for the Eastern District of Texas, Tyler Division, alleges that from about September 2004 through April 2007 Lemons misappropriated over $1.3 million in funds from at least three of his customers.
According to the Commission's complaint, Lemons managed the financial affairs for some of his customers and misused their trust to perpetrate his fraudulent scheme. The complaint alleges that Lemons had his customers sign bank and brokerage documents in blank, under the false pretense that he would use the documents to liquidate securities in their accounts and reinvest the proceeds in higher yielding securities. Lemons instead used the documents signed in blank to extract funds for his personal use from the accounts of his customers without their authorization. According to the complaint, the majority of the misappropriated funds appear to have been used to cover Lemons's gambling losses of approximately $1.4 million.
In its complaint, the Commission alleges that Lemons violated Section 10(b) of the Securities Act of 1934 and Rule 10b-5 there under. The Commission is seeking a permanent injunction, disgorgement plus prejudgment interest, and a civil money penalty against Lemons.