SEC Obtains Final Judgment Against Investment Adviser Charged with Fraud
Litigation Release No. 25190 / August 31, 2021
Securities and Exchange Commission v. Steven Fitzgerald Brown, Civil Action No. 2:20-cv-08058-JFW-PD (C.D. Cal. filed September 3, 2020)
The Securities and Exchange Commission announced the entry of a final judgment against a former California investment adviser Steven Fitzgerald Brown in connection with a fraud arising from his operation of investment pool, Alpha Trade Analytics, Inc.
The SEC's complaint, filed on September 3, 2020 in the United States District Court for the Central District of California, charged Brown, the CEO, president, and sole owner and director of Alpha Trade with engaging in a Ponzi-like scheme using Alpha Trade's investment fund and that Brown, as investment adviser to the fund, misappropriated or misused investor funds for his own benefit.
In a parallel action, the United States Attorney's Office for the Central District of California announced that Brown pleaded guilty to wire fraud. On June 29, 2021, Brown was sentenced to 51 months of imprisonment, followed by three years of supervised release, and ordered to pay restitution of $3,313,346 to his victims.
On August 24, 2021, the United States District Court for the Central District of California entered a final judgment by consent against Brown. Pursuant to the final judgment, Brown was permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The judgment against Brown also orders him to pay disgorgement of $2,613,346 plus prejudgment interest of $65,833, which is deemed satisfied by the criminal restitution order.
The SEC's case was handled David S. Brown and Maria Rodriguez and supervised by Amy Jane Longo in the SEC's Los Angeles Regional Office. The SEC appreciates the assistance of the Federal Bureau of Investigation and United States Attorney's Office for the Central District of California.