U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19663 / April 19, 2006
SEC v. Sherwin P. Brown, Jamerica Financial and Brawta Ventures, LLC, Civil Action No. 06-1213 (D. Minn.) (Magnuson, J.)
The Securities and Exchange Commission ("Commission") announced that on April 14, 2006, the Honorable Paul A. Magnuson of the United States District Court for the District of Minnesota issued a Preliminary Injunction Order along with asset freeze and other relief against Sherwin P. Brown ("Brown"), Jamerica Financial, Inc. ("Jamerica") and Brawta Ventures, LLC ("Brawta"), in connection with an alleged fraudulent scheme to misappropriate funds from investors, a number of whom are retired or near retirement.
According to allegations in the Commission's civil injunctive complaint that was filed on March 29, 2006, Brown is the majority owner and President of Jamerica, a Minneapolis, Minnesota-based investment advisor. Brown is also manager of Brawta, a purported private investment fund formed by Brown and Jamerica. The Commission's complaint alleges that Brown, Jamerica and Brawta raised at least $1.65 million from 53 investors and defrauded the investors of Brawta by misappropriating approximately $569,950 of investor funds, and used the diverted proceeds to pay for Brown's personal expenses and Jamerica's business expenses.
The Commission's complaint alleged that the defendants' conduct violated the antifraud and record keeping provisions of the federal securities laws. In addition to an injunction and asset freeze, the Commission's complaint also seeks the disgorgement of any investor funds defendants may have misappropriated as well the imposition of civil penalties.
In the Preliminary Injunction Order, Brown, Jamerica and Brawta consented to the appointment of a receiver over Brawta, who will have the authority to manage the investment fund and marshal and protect the assets of the Brawta investors.