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SEC Fine of Brubaker Becomes Court Order

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WASHINGTON (–A federal court in Colorado granted a Securities and Exchange Commission request and ordered Brett G. Brubaker of Texas Creek, Colo., to pay a fine the SEC imposed three years ago.

Mr. Brubaker is a former registered representative of Abraham & Sons Capital, Inc., formerly a registered investment advisor that did business in Illinois in 2001. Through Abraham & Sons, Mr. Brubaker created and managed a short-dedicated hedge fund, Abraham & Sons LP, beginning in 1991, according to the SEC. Abraham & Sons Inc. was the affiliated broker-dealer, and the hedge fund’s trades were cleared through Spear, Leeds & Kellogg.

According to the findings of an administrative law judge in 1999, the fund sent seven letters to its limited partners between June and December of 1995 that significantly misstated actual performance and the value of partnership interests. In July 2001 the SEC found that Mr. Brubaker and Abraham & Sons had defrauded clients by materially overstating their hedge fund’s performance. The Commission imposed a US$50,000 civil penalty.

In August 2003 the SEC went to court in Colorado, where Mr. Brubaker apparently now resides, alleging that he had failed to pay the civil penalty. Accordingly, on May 3, Judge Wiley Y. Daniel entered a judgment against Mr. Brubacker and Abraham & Sons ordering compliance within 21 days.

Mr. Brubacker couldn’t be reached for comment, but he had previously appealed the fine, contending that he did not have the resources to pay it. The SEC took no cognizance of the claim of inability to pay, though, because it was unsupported by the sworn financial disclosure statement mandated in the practice rules.

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Contact Robert F. Keane with questions or comments at:

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