CHICAGO (CN) - The SEC froze the assets of Brewer Financial Services, saying the two men who run it - Steven Brewer and Adam Erickson - took $5.6 million from their customers and funneled the money to another company. The agency accuses the men of fraudulent offerings of unregistered securities.
The SEC sued Brewer, Erickson, Brewer Financial Services, Brewer Investment Group and Brewer Investment Advisors, in Federal Court.
It claims they "participated in fraudulent, unregistered offerings of promissory notes issued by FPA Limited ('FPA'), an Isle of Man company, in the aggregate amount of $5.6 million to at least 74 investors. Through the fraudulent offerings, BIG and Brewer funneled cash to BIG and one of its subsidiaries when the entities were under significant financial distress. The offering materials that defendants created and used for the offerings of FPA promissory notes ('FPA Notes') failed to disclose that over 90% of the proceeds would be disbursed at Brewer's direction to BIG and then to its wholly owned subsidiaries. In addition, the offering materials misrepresented the risk of the investment and failed to disclose the precarious financial condition of BIG and its subsidiaries."
Brewer and Erickson are co-owners of BIG. Defendant Brewer Financial Services has 25 branch offices, in nine states; Brewer Investment Advisors has branch offices in "several states," according to the complaint.
The SEC seeks disgorgement, penalties and injunctions.
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