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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. 49249 / February 13, 2004

Admin. Proc. File No. 3-11397


In the Matter of

BROWNSTONE CAPITAL CORPORATION And GREGORY COOPER

Respondents.



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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 Brownstone Capital Corporation (""Brownstone Capital") and Gregory Cooper ("Cooper") (collectively "Respondents").

II.

In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the "Offers"), 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 them and the subject matter of these proceedings, and the findings contained in Sections III. C, D, and F below, which are admitted, Respondents consent 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 Respondents' Offers, the Commission finds that:

A. Brownstone Capital is a broker-dealer registered with the Commission pursuant to Section 15(b) of the Exchange Act since June 16, 1983.

B. From 1994 through December 1998, Cooper was a registered representative associated with various broker-dealers registered with the Commission. From September 1996 to December 1998, Cooper controlled and was the chairman and a general securities principal of Brownstone Capital. Cooper also was the chairman of Brownstone Capital's parent corporation, Brownstone Holdings Inc., a/k/a The Brownstone Group ("Brownstone Group"), and of Blackstone Entertainment ("Blackstone"), two entities that he operated and controlled. Cooper, 35 years old, is a resident of Florida.

C. On November 17, 2003, the United States District Court for the Southern District of New York entered a final judgment, by consent, against Brownstone Capital, Permanently enjoining it from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 77e(a), 77e(c) and 77q(a), Sections 10(b), 15(c), 17(a) and 17(b) of the Exchange Act, 15 U.S.C. 78j(b), 78o(c), 78q(a) and 78q(b), and Rules 10b-3, 10b-5, 15c1-2, 15c1-5 and 17a-4(j), 17 C.F.R. 240.10b-3, 240.10b-5, 240.15c1-2, 240.15c1-5, and 240.17a-4(j), and ordering it to pay disgorgement of $9,961.48 in an action entitled Securities and Exchange Commission v. TheBrownstone Group, et al., Civil Action Number 98-CV-8540.

D. On November 17, 2003, the United States District Court for the Southern District of New York entered a final judgment, by consent, against Cooper permanently enjoining Him from future violations of Section 17(a) of the Securities Act, 15 U.S.C. 77q(a), Sections 10(b), 15(c), 17(a) and 17(b) of the Exchange Act, 15 U.S.C. 78j(b), 78o(c), 78q(a) and 78q(b), and Rules 10b-3, 10b-5, 15c1-2, 15c1-5 and 17a-4(j), 17 C.F.R. 240.10b-3, 240.10b-5, 240.15c1-2, 240.15c1-5, and 240.17a-4(j), and barring him from serving or acting as an officer or director of any issuer that has a class of securities registered under Section 12 of the Exchange Act, 15 U.S.C. 78l, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. 78o(d), pursuant to Section 20(e) of the Securities Act, 15 U.S.C. 77t(e), and Section 21(d)(2) of the Exchange Act, 15 U.S.C. 78u(d)(2) in an action entitled Securities and Exchange Commission v. The Brownstone Group,et al., Civil Action Number 98-CV-8540.

E. In the civil action discussed above, the Commission's complaint alleged, among other things:

From March 1997 to in or about December 1998, Brownstone Capital and co-defendant, Cooper and others, offered and sold unregistered shares of Brownstone Holdings and Blackstone Entertainment to the investing public through three purported private offerings. Cooper controlled Brownstone Capital and each of the issuers whose securities were sold in the offerings. In connection with these offerings, Brownstone Capital, which was the selling agent for these offerings, distributed private placement memoranda to investors that contained numerous material misrepresentations. Additionally, Brownstone Capital registered representatives ("RRs") made numerous material misrepresentations to investors to induce them to purchase securities in these offerings. For example, in July 1997, Brownstone Capital RRs told investors in one of the offerings that if they invested they would double their money within one month. Cooper directed RRs at Brownstone Capital to solicit investors to purchase shares through the offerings. Brownstone Capital also failed to make required books and records reasonably accessible, and to furnish copies of some of those records, to the Commission staff.

F. On June 11, 1999, Cooper pled guilty to one count of mail fraud in violation of Title 18 United States Code, Sections 1341 and 1342 before the United States District Court for the Southern District of New York in an action entitled United States v. Gregory Cooper, 99-Crim-298 (S.D.N.Y.). On November 29, 1999 Cooper was sentenced to a prison term of 24 months followed by two years of supervised release and ordered to make restitution in the amount of $1,881,242.00.

G. The count of the criminal indictment to which Cooper pled guilty alleged, among other things, that, in connection with the transactions described herein, Cooper defrauded investors and obtained money and property by means of materially false and misleading statements, and that he used the United States mails and commercial interstate carriers to send fraudulent private placement memoranda to investors.

IV.

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

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(4) of the Exchange Act, Brownstone Capital's registration with the Commission as a broker-dealer is hereby revoked and pursuant to Section 15(b)(6) of the Exchange Act, Cooper is hereby barred from association with any broker or dealer.

By the Commission.

Jonathan G. Katz
Secretary


http://www.sec.gov/litigation/admin/34-49249.htm


Modified: 02/13/2004