Robert Emmet Brennan

New York native born in 1944 and reared in New Jersey, Robert E. Brennan, a CPA by training, founded the penny stock trading firm, First Jersey Securities in 1974 after already having been censured by the SEC for improper trading activities. In 1978, the SEC brought an administrative action against the firm for violating securities laws. Brennan became known for his advertisements, arriving by helicopter and enticing potential clients to, “come grow with us.” While Brennan was a high flier, living a lavish lifestyle, he and his firm came under further scrutiny by the SEC for its “pump and dump” boiler room penny stock trading activities. At his high water mark, Brennan owned three racetracks, a golf resort, three multimillion dollar homes, racehorses, restaurants and other real estate. The SEC filed an action on October 31, 1985 alleging securities fraud and seeking disgorgement of illegal profits. It claimed that First Jersey Securities, at the direction of Brennan, “employed a massive and coordinated system of fraudulent practices to induce its customers to buy certain securities from the Firm at excessive prices unrelated to prevailing market prices, resulting in defendants' gaining more than $27 million in illegal profits from their fraudulent scheme.” Many clients of the firm reportedly lost their life savings in the scheme. First Jersey Securities filed for bankruptcy in 1987 and ceased operations. Finally, in June 1995, after a protracted trial, First Jersey and Brennan were found by the jury to have violated various securities laws and regulations and ordered to disgorge profits of more than $22 million. A judgment of $75 million was also entered against Brennan. To avoid the judgment, Brennan filed for personal bankruptcy under Chapter 11 of the US Bankruptcy code in August 1995. In September 1995, Brennan was also charged both civilly and criminally by the State of New Jersey alleging securities fraud for the period 1991 through 1994. On July 19, 2000, Brennan was indicted for attempting to hide assets in the bankruptcy case by cashing $500,000 worth of casino chips at the Mirage Hotel in Las Vegas which he had failed to report. Brennan had also delivered a bearer bond valued at nearly $4 million to an agent in the Isle of Man to secretly hold offshore for him in a dummy trust fund. As a result, on April 11 2001, Brennan was found guilty by a jury on seven felony counts of money laundering and bankruptcy fraud. On July 22, 2001, Brennan was sentenced to 110 months in prison for these acts. Brennan was convicted on separate federal charges of criminal contempt of court in 2003 for violating an Asset Freeze Order and sentenced to an additional 36 months in prison to run concurrently with the existing 110 month sentence. The charges stem from Brennan’s failure to disclose an ownership interest in the Palm Beach Princess, a gaming ship based out of West Palm Beach, Florida. According to the judge in the case, “Brennan appears to be without remorse for having harmed thousands of investors by his conduct. He has attempted to avoid efforts to recover money taken from those investors… and hidden substantial assets from regulators, the trustees and the bankruptcy court to frustrate that purpose.” He is currently serving his term in federal prison at Fort Dix, New Jersey.