LITIGATION RELEASE NO. 21483 / April 9, 2010

SEC v. Renee Marie Brown, et al, Civil Action No. 10-CV-1207 (District of Minnesota, April 8, 2010)


On April 8, 2010, the Honorable Donovan W. Frank of the United States District Court for the District of Minnesota issued a temporary restraining order and asset freeze against Renee Marie Brown (Brown), a Minnesota-based investment adviser, and Investors Income Fund X, LLC (Fund X), a company formed and controlled by Brown.

The SEC alleges that Brown misappropriated advisory clients' money. The SEC alleges that from July 2009 through March 2010, Brown fraudulently raised more than $1.1 million from six investors by convincing them to transfer their money to Fund X. The SEC alleges that Brown told her investors that Fund X is a "bond fund" with fixed annual returns of 8% or 9%. The SEC alleges that she distributed fictitious "returns" to investors, furthering the fiction that Fund X was a legitimate and successful investment opportunity. The SEC alleges that, unbeknownst to her victims, Fund X is a sham — Brown's alter ego. The SEC alleges that Brown misappropriated most of the $1.1 million she raised from investors to, among other things, purchase a condominium for herself and build-out office space for her new business.

The SEC's complaint charges Brown and Fund X with violating Sections 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Brown with violating Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

The SEC's complaint seeks permanent injunctive relief and disgorgement from the Defendants, and civil penalties from Brown.


Last modified: 4/09/2010