Another suit filed against former Compass Academy owners
A recent complaint against Jonathan “Jay” and Tracy Brooks alleges the two used nearly $500,000 for their “own personal ambitions” instead of investing it in Compass Academy.
On Oct. 3, Denton County, Texas residents James and Janice Seely filed a list of complaints against the Brookses, which Jay and Tracy denied with short responses on Dec. 3.
“I deny all allegations in this case until such case as I obtain representation. I will respond appropriately at such time,” the Brookses' response said.
The Seelys – named as the plaintiffs in the complaint – claim they gave the Brookses permission to liquidate nearly $500,000 in annuities to fund investments in Compass Academy. They stated that the Brookses had too much unity between their business ventures which include Brooks Financial, Brooks Real Estate and Compass Academy. Because of that unity, the Seelys feel that financial gain was the Brookses' main purpose, according to the complaint.
“Such a high degree of unity of interest and purpose exists that they lack distinct and separate identities and amount to a singular enterprise wholly dominated and controlled by Mr. and Mrs. Brooks and designed to enrich Mr. and Mrs. Brooks and to further their own personal ambitions at the expense of unsuspecting investors,” the complaint states.
The Seelys believe that they should be entitled to actual damages, punitive damages, costs, attorney fees, lost interest and other relief for the fraudulent acts of the Brookses, according to the complaint.
In addition to the defendants, the complaint states that High Street Securities should be held accountable for the alleged acts of fraud. Jay was a registered representative of High Street before being fired in November.
“High Street's failure to employ proper internal controls and to properly and effectively supervise the conduct of its registered agent, Mr. Brooks, allowed the Brooks Defendants to commit numerous securities law violations, including but not limited to fraud as alleged herein. As a consequent and proximate result of High Street's failure, Mr. and Mrs. Seely suffered substantial injury and damages,” the complaint alleges.
Jay Brooks was indicted on two counts of securities fraud, one count of forgery and a violation of the Securities Act in November. The felonies are punishable by up to 10 years in prison and/or fines.
Brooks, his wife Tracy and his companies have been accused by the S.C. Attorney General's office of illegally selling unregistered securities to fund the establishment of their private school, Compass Academy.
They have also been accused by the Securities Division of the attorney general's office of using those funds to buy groceries, their home, vacations and jewelry, rather than investing them.
The couple also faces multiple other civil lawsuits.
Derrek Asberry is a beat reporter with the Aiken Standard. He joined the paper in June. He is originally from Vidalia, Ga., and a graduate of Georgia Southern University. Follow him on Twitter @DerrekAsberry.