Financier Arrested on Bankruptcy Charges

Disgraced financier Robert E. Brennan, who, before regulators labeled him a cheat, appeared in TV commercials urging investors to buy penny stocks, was arrested and charged with bankruptcy fraud. Two indictments were unsealed with Brennan’s arrest, both related to his cashing of $500,000 in casino chips five years ago. These are the first criminal charges Brennan has faced. He was arrested at his Colts Neck, N.J., home. Brennan, 56, became nationally known in the 1980s through commercials for his First Jersey Securities Inc. in which he stepped from a helicopter and told investors to “come grow with us.” He declared bankruptcy in 1995 when a federal judge in New York ruled that he had cheated First Jersey investors and ordered him to pay what is now more than $78 million to the Securities and Exchange Commission. The SEC charged Brennan employed “boiler room” tactics at First Jersey and manipulated the market in low-cost, high-risk shares of little-known companies--the so-called “penny stocks”--to fleece people who were pursued by a high-pressure sales force. The five-count New Jersey indictment includes charges that Brennan failed to declare the money, and a six-count federal indictment charges him with making false statements in a bankruptcy proceeding. The state indictment could carry a penalty of up to 10 years in prison. Each of the six federal charges carries a penalty of up to five years in prison. *

Guide to Our Staff: Need to reach Business section reporters or editors? A guide to the section’s staff can be found at: https://www.latimes.com/bizstaff.