Advertisement
YOU ARE HERE: LAT HomeCollections

California | SOUTHLAND FOCUS

Soccer Coach Gets 30 Months in Stock Fraud

October 31, 2000|Bloomberg News

A Los Angeles high school soccer coach was sentenced to 30 months in federal prison for defrauding two brokerage firms of $7.7 million in 1998 in a "free-riding" scheme. Aerick Wesley Brown, 35, who pleaded guilty to securities fraud in August, was sentenced by U.S. District Judge Audrey B. Collins. In early 1998, Brown deceived both Piper Jaffray, a unit of U.S. Bancorp, and Van Kasper & Co. into selling $54 million worth of America Online Inc. and Dell Computer Corp. shares that he didn't own, hoping their prices would drop and allow him to profit by replacing them with cheaper shares. Instead, the price of both stocks rose. Brown never delivered the shares to the brokers, forcing them to buy replacement shares at higher prices. Because Brown was free-riding, the brokers had no collateral to shield them from the $7.7 million loss--the difference between his sales prices and their subsequent purchase prices. The judge recommended that Brown serve his time in a federal boot camp, which would allow him to move to a halfway house after six months.

For the Record
Los Angeles Times Thursday November 2, 2000 Home Edition Business Part C Page 2 Financial Desk 1 inches; 32 words Type of Material: Correction
Soccer coach--A headline in Tuesday's Business section misstated the length of the sentence of a Los Angeles soccer coach convicted of defrauding two brokerages. Aerick Wesley Brown was sentenced to 30 months in federal prison.

Advertisement
Los Angeles Times Articles
|
|
|