WASHINGTON, DC (January 15, 2010) – The North American Securities Administrators Association (NASAA) announced today that state securities regulators are seeking as many as 27,000 investors who may be eligible to participate in a multi-million dollar distribution plan approved by the New Jersey Superior Court as part of a securities fraud case.
“This case demonstrates the perseverance typical of state securities regulators to provide real results for investors,” said NASAA President and Texas Securities Commissioner Denise Voigt Crawford.
The distribution plan provides $5.15 million to investors who were defrauded by Robert Brennan and marks a significant milestone in a case the New Jersey Bureau of Securities began in 1995. New Jersey securities regulators in August 1995 filed suit against Brennan and L.C. Wegard, an investment firm Brennan controlled, and other defendants, alleging violations of the New Jersey Securities Law and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act. Brennan that same month filed a voluntary Chapter 11 bankruptcy petition. In June 1999, the Bureau obtained a $45 million non-dischargeable judgment against Brennan and L.C. Wegard, which had offices in a number of states including New Jersey, Pennsylvania, New York, Rhode Island and Illinois.
An effort to find assets to satisfy the judgment began in 1999 after Brennan claimed he did not have assets. Ultimately, Bureau investigators tracked down and seized assets that Brennan had attempted to hide, including a pension fund that he had set up for himself.
“The Bureau of Securities is working with the receiver and other securities industry regulators in the massive undertaking to inform the estimated 27,000 affected investors of this distribution plan,” said Marc B. Minor, Bureau Chief. “We want to get as much of the recovered funds as possible into the hands of these long-suffering investors.”
L.C. Wegard customers during the period October 1, 1991 to September 1994 may be qualified to file a claim if they purchased any of the following securities during this time period:
— Chefs International, Inc.
— Consolidated Technology Group, Ltd. (f/k/a Sequential Information Systems, Inc.)
— Diamond Entertainment Corp.
— Futurebiotics, Inc.
— Gates / FA Distributing, Inc.
— Gentner Communications Corp.
— Great American Recreation, Inc.
-Zero Coupon Subordinated Debentures
-Subordinated Pay in Kind Debentures
— Immunotherapeutics Corp.
— Lafayette Industries, Inc.
— Linkon Corp.
— Metalclad Corp.
— Nacoma Consolidated Industries, Inc.
— Non-Invasive Monitoring Systems, Inc.
— Officeland, Inc.
— PDK Labs, Inc.
— Primedex Health Systems, Inc.
-Subordinated Convertible Debentures
— Process Equipment, Inc.
— Sanyo Industries, Inc.
— Site Holdings, Inc. (f/k/a Site-Based Media, Inc.)
— US Transportation Systems, Inc.
If the above criteria are met, investors can obtain a “Proof of Claim” online at www.mercadienclaimsadministration.com or by writing to: Donald F. Conway, Receiver, P.O. Box 7648, Princeton, N.J. 08543-7648.
For more information, contact Jeff Lamm, Public Information Officer with the New Jersey Division of Consumer Affairs at 973-504-6327.
NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.