SEC Pursues Former Ft. Hood Solider on Securities Fraud Charges

The Securities and Exchange Commission (“SEC”) is pursuing fraud charges against a former Fort Hood, Texas, soldier it accuses of posing as a licensed stockbroker in an attempt to get former U.S. military personnel to invest funds with him.

The SEC alleges that Leroy Brown Jr., who served in the U.S. Army for 12 years, used his military connections to lure targeted military personnel into purchasing $1,000 membership certificates in a company he established, LB Stocks and Trades Advice LLC. On its website, the company claims that Brown is a FINRA broker/dealer and provides a variety of investment services — all of which the SEC alleges is untrue.

According to the SEC complaint, Brown told potential investors to wire funds to a LB Stocks brokerage account to participate in an investment in undeveloped land. Brown allegedly claimed the investors could double or triple their investment in 120 days. Upon receiving the funds, the SEC charges that Brown transferred them from the brokerage account into his personal bank account.

The SEC has charged Brown and LB Stocks and Trades Advice LLC with securities fraud and conducting an unregistered securities offering. The complaint was filed in the U.S. District Court for the Western District of Texas, which ordered an asset freeze on all Brown’s personal accounts and the brokerage accounts of LB Stocks and Trades Advice LLC.

The SEC has asked the court for financial penalties, disgorgement of ill-gotten gains and permanent injunctive relief.

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