U.S. Securities and Exchange Commission Litigation Release No. 15022 / August 22, 1996 SECURITIES AND EXCHANGE COMMISSION v. LAURENCE M. BROWN, 94 Civ. 7112, U.S.D.C., S.D.N.Y. (DAB) NEW YORK -- The Securities and Exchange Commission ("Commission") announced that, on July 26, 1996, Judge Deborah A. Batts of the United States District Court, Southern District of New York, issued a permanent injunction against Laurence M. Brown ("Brown") enjoining him from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 15(a), 15C(a)(1)(A) and 15C(e)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court also ordered Brown to disgorge $1,702,031, representing his gains from the conduct alleged in the Complaint filed by the Commission, plus prejudgment interest in the amount of $2,014,892, for a total amount of $3,716,923. The Permanent Injunction stems from a Complaint filed by the Commission against Brown on September 30, 1994, seeking, among other things, injunctive relief and disgorgement. The Commission's Complaint in this matter alleged that Brown, a resident of Chappaqua, New York, is the President, Chief Executive Officer, and sole owner of Phoenix Capital Group, Inc. ("Phoenix"), which was operating as an unregistered government securities broker-dealer. In addition, the Complaint alleges that, from in or about January 1986 to in or about December 1989, Brown violated the antifraud provisions of the federal securities laws by inducing customers to invest a total of $2,694,681 with Phoenix, falsely representing to the customers that their monies would be used to purchase government securities. Instead, Brown misappropriated approximately $1,702,031 of the monies raised from investors. The Complaint further alleges that Brown, as a controlling person of Phoenix, operated Phoenix as an unregistered government securities broker-dealer and as an unregistered broker-dealer from July 1987 until at least December 1989. Brown consented to the entry of the injunction without admitting or denying the allegations in the Commission's Complaint. Brown has also been convicted on criminal charges arising from the foregoing activities, and, in connection with his criminal conviction, has been ordered to comply with the disgorgement order in this matter. For further information, see Lit. Rel. No. 14271.