Defrauded PA Investors May Claim Share of Multi-Million Dollar Distribution Plan

$5.15 million available to investors in securities fraud case

Jan 21, 2010, 16:07 ET from Pennsylvania Securities Commission

HARRISBURG, Pa., Jan. 21 /PRNewswire/ -- The Pennsylvania Securities Commission (PSC) is looking for Keystone State investors who may have been defrauded in the purchase of stocks or warrants through Robert Brennan and L.C. Wegard, a New Jersey brokerage, in the early 1990s and who are eligible to participate in the proceeds of a multi-million dollar settlement approved by the New Jersey Superior Court as part of a securities fraud case.

Up to 27,000 investors in states including Pennsylvania may be eligible to participate in a $5.15 million distribution plan approved by the New Jersey Superior Court.

"It is not yet known how many Pennsylvania investors may have been defrauded," said PSC Chairman Bob Lam. "Since Brennan and L.C. Wegard had offices set up in Pennsylvania, we expect that a number of investors will be coming forward in the coming weeks."

The distribution plan set up for investors defrauded by Brennan is a significant step in a case that the New Jersey Bureau of Securities began in 1995. In August 1995, New Jersey Securities regulators filed suit against Brennan and L.C. Wegard, an investment firm Brennan managed, and other defendants, alleging violations of the New Jersey Securities Law and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act. That same month, Brennan filed a voluntary Chapter 11 bankruptcy petition. In June 1999, the New Jersey Board of Securities obtained a $45 million non-dischargeable judgment against Brennan and L.C. Wegard.

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 Pennsylvania Securities Commission is working with the New Jersey Bureau of Securities to contact investors affected by the distribution plan," said PSC Commissioner Tom Michlovic. "These investors have suffered enough for years, and we want to get as much of the recovered funds as possible to those individuals quickly."

PSC Commissioner Steve Irwin noted that the Brennan/Wegard case was another example of why "vigorous state-by-state enforcement is a needed and effective tool to protect investors." Federal securities reform legislation, he said, "must preserve a strong role for the states."

Customers of L.C. Wegard during the period of October 1, 1991 to September 1994 may be eligible to file a claim if they purchased any of the following securities during this time period:

  • AGP&Co.
  • Chefs International, Inc.
  • Consolidated Technology Group, Ltd. (f/k/a Sequential Information Systems, Inc.)
  • Diamond Entertainment Corp.
    • Common stock
    • Warrants
  • Futurebiotics, Inc.
  • Gates / FA Distributing, Inc.
  • Gentner Communications Corp.
  • Great American Recreation, Inc.
    • Common stock
    • 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.
    • Common stock
    • 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 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.

SOURCE Pennsylvania Securities Commission