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1
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SEC ADMINISTRATIVE PROCEEDING
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EXTRACTED KEY WORDS
MOREHEAD INVESTMENT BROOKS EXCHANGE ACT ADVISERS ACT SECURITIES COMMISSION INVESTMENT COMPANY GEORGE ADMINISTRATIVE PROCEEDING CEASE-AND-DESIST ORDERS MOREHEAD INVESTMENT ADVISORS INSTITUTING PRINCIPAL SHAREHOLDER ALLEGES TRANSACTIONS CUSTOMERS VIOLATE REMEDIAL ACTION ENTRY ACCOUNTING DISGORGEMENT UNLAWFUL PROFITS IMPOSITION CIVIL PENALTIES WEAK FINANCIAL CONDITION BROCHURE FILING BOOKS-AND-RECORDS REQUIREMENTS |
U.S. Securities and Exchange Commission
Securities Exchange Act of 1934
Release No. 39921 / April 27, 1998
Investment Company Act of 1940
Release No. 23130 / April 27, 1998
Investment Advisers Act of 1940
Release No. 1719 / April 27, 1998
Administrative Proceeding
File No. 3-9589
In the Matter of George E. Brooks & Associates, Inc., Morehead
Investment Advisors, Inc., and George E. Brooks
The Securities and Exchange Commission announced today that
it has instituted administrative and cease-and-desist proceedings
against George E. Brooks & Associates, Inc. ("Associates"),
Morehead Investment Advisors, Inc. ("Morehead"), and George E.
Brooks ("Brooks") all of Charlotte, North Carolina. Associates
has been registered with the Commission as an investment adviser
since January 1991. Morehead has been registered with the
Commission as a broker-dealer since December 1993. Brooks was
the principal shareholder and president of Associates, and a
principal shareholder and chairman of the board of directors of
Morehead.
The order instituting public proceedings alleges that Brooks
engaged in a series of free riding transactions on behalf of
Associates, Morehead, a Morehead employee, and certain customers
of Morehead, effected unsuitable securities transactions for
certain customers of Morehead, and caused Morehead to violate net
capital and books and records requirements. The order also
alleges that Brooks caused Associates to fail to disclose to
clients its weak financial condition, and caused Associates to
violate certain brochure, filing, and books-and-records
requirements.
A hearing will be held to determine whether the allegations
contained in the Order are true. The administrative proceedings
also will determine: (1) whether remedial action under Sections
203(e) and 203(f) of the Investment Advisers Act of 1940
("Advisers Act"), entry of cease-and-desist orders under Section
203(k) of the Advisers Act, an accounting and disgorgement of
unlawful profits under Sections 203(j) and 203(k)(5) of the
Advisers Act, and the imposition of civil penalties under Section
203(i) of the Advisers Act are appropriate and in the public
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