FINRA Equity Linked Note Fraud and Misrepresentation Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
Recently, The Securities and Exchange Commission (“Commission”) deemed it appropriate and in the public interest that public administrative and cease-and-desist proceedings be instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange Act”), Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”), and Section 9(b) of the Investment Company Act of 1940 (“Investment Company Act”) against David G. Brouwer (“Respondent” or “Brouwer”).
In anticipation of the institution of the proceedings, Respondent submitted an Offer of Settlement (the “Offer”) which the Commission 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 him and the subject matter of these proceedings, which are admitted, Respondent consented to the entry of an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the Securities Exchange Act of 1934, Section 203(f) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.
On the basis of this Order and Respondent’s Offer, the Commission found that the Respondent made material misrepresentations about and failed to disclose certain material risks associated with equity-linked notes that he recommended as investments to certain customers in 2007 and 2008 while Respondent was a registered representative associated with broker-dealer and investment adviser Great American Advisors, Inc. (“Great American”). Additionally, Respondent’s recommendation of equity-linked notes to at least two of his customers was unsuitable based on their investment objectives, stated risk tolerance, and other factors.
Based on the findings made by the Commission, the Respondent Brouwer was barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization, and prohibited from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter.
If you would like to review the entire order entered by the Commission, please follow the highlighted link.