Sunday, March 12, 2006

The Slow Wheels of Justice

Great piece in the Asbury Park Press today about the last chapter in the long-running saga of Bob Brennan and First Jersey Securities.

Brennan was a photogenic guy who ran a brokerage firm that pushed its wares on the public in the 1980s. He was famed for his TV commercial, one of which showed him arriving in a helicopter at a building resembling the White House. "Come Grow With Us," the announcer would say.

Some tough financial journalists -- predecessors to the ones receiving SEC subpoenas today -- proved that Brennan was a charlatan. For years he was unsuccessfully pursued by the SEC.. But eventually, long after the last investor was fleeced, the feds finally nailed Brennan.

The Press picks up the story:

[Brennan] filed for bankruptcy in August 1995, shortly after a federal court judge said he defrauded investors and fined him $75 million.

Federal investigators eventually determined that Brennan didn't disclose everything he owned on his bankruptcy petition. He was tried and convicted of bankruptcy fraud. And he is serving a 12-year sentence at the federal prison at Fort Dix.

The bankruptcy court trustee, Donald F. Conway, actually did a pretty good job of tracking down Brennan's assets and distributing $62 million to victims. Still, that's less than half of the $143.3 million in restitution Brennan was ordered to pay.

Anyway, it's a nice piece. There are plenty of microcap-pushing Bob Brennans out there -- none quite so big, but in the aggregate they are far more of a danger to investors than Bob Brennan ever was. It's a shame we don't see more media attention to this problem.

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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

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