Securities Lawyers Blog
The law offices of Gana Weinstein LLP recently filed a complaint before The Financial Industry Regulatory Authority (FINRA) on behalf of a couple against brokerage firm Comprehensive Asset Management and Servicing, Inc. (CAMAS) and Tamara Steele (Steele) concerning Steele’s recommendation to invest substantial sums in Behavior Recognition Systems (BRS) (n/k/a Giant Gray, Inc.). The Claimants alleged that CAMAS failed to supervise Ms. Steele’s sales of BRS or conduct due diligence and that BRS turned out to be a vesicle for investment fraud. BRS raised tens of millions from investors while its owner, Ray Davis (Davis), allegedly misappropriated a sizable portion of investor funds. Upon information and belief, Steele solicited her clients to investment millions in BRS.
BRS was a software development company based in Houston, Texas that focused on technology that could analyze video content by imitating learning and memory processes of the human brain. BRS was founded in 2005 by Davis and he served as BRS’ Chairman of the Board until September 2015 and CEO until August 2014. In or around 2013 BRS’ revenues plummeted and its net operating losses increased substantially. By 2014 BRS’ total sales were only $765,000 and the firm suffered a net loss of $37.7 million.
According to the complaint, in late 2013 Steele recommended BRS to the couple notwithstanding BRS’ failing business model and its CEO’s unsuccessful past. Steele pitched Claimants on an investment in BRS as an opportunity to earn income between 8% and 12%. Claimants alleged that the primary source of most of the Claimants investment in BRS came from their accounts managed by Steele through her advisory firm – Steele Financial Inc. The complaint alleges that Steele was so confident in BRS that she initially recommended the Claimants borrow money from a bank to invest in BRS.