The allegations read: Sec admin release 33-9047, 34-60190, ia release 2898, june 30, 2009: the securities and exchange commission ("commission" or "sec") deemed it appropriate and in the public interest that public administrative and cease-and-desist proceedings be instituted pursuant to section 8a of the securities act of 1933 ("securities act"), sections 15(b) and 21c of the securities exchange act of 1934 ("exchange act") and section 203(f) of the investment advisers act of 1940 ("advisers act") against eric j. Brown ("brown"), a broker-dealer firm ("firm"), its parent company ("company"), and several supervisors and registered representatives of the firm. The sec alleged that the firm and its associated registered representatives, brown and others, offered and sold variable annuities to senior citizens in south florida by means of material misrepresentations and omissions. The sec alleged that many of the variable annuities sold were unsuitable investments for the elderly customers due to the customers' ages, liquidity and investment objectives. The sec also alleged that the firm's parent company aided and abetted the firm's fraud by arranging free-lunch seminars at which the firm registered representatives recruited elderly customers whom they later induced to buy variable annuities. The sec further alleged that the firm and its president failed to implement the firm's supervisory procedures in a way that reasonably could be expected to detect and prevent the registered representatives' violations of the federal securities laws. Additionally, the sec alleged that president, chief compliance officer, and supervisors failed reasonably to supervise registered representatives with a view toward detecting and preventing their violations of the federal securities laws. The sec alleged that brown committed fraud pursuant to section 17(a) of the securities act of 1933 and section 10(b) of the securities exchange act of 1934 and rule 10b\\u00ac5 thereunder, and aided and abetted firm's books and records violations under section 17(a) of the securities exchange act of 1934 and rule 17a-3 thereunder.
