A judge decided to move two of the pending lawsuits against Compass Academy founder Jay Brooks to an inactive roster due to the receivership in place over Brooks’ companies and assets.
The inactive roster consent order was filed by attorneys for High Street Securities Inc. in two of the suits that name the Arkansas-based company as a defendant.
Both orders were signed by Circuit Court Judge Doyet “Jack” Early earlier this month.
Each of the suits name Brooks, as well as his companies J. Brooks Financial and Brooks Real Estate Holdings, along with High Street Securities, as defendants; and they were scheduled on a trial roster for this week.
After Brooks and his wife, Tracy, were accused by the Securities Division of the Attorney General’s office of selling unregistered securities to fund the establishment of Compass Academy and converting those funds to personal use, a judge appointed Columbia attorney Sherri Lydon as the receiver of the frozen assets of Compass Academy, as well as Brooks and his related companies.
The “Brooks Defendants” are still subject to that receivership, according to the order.
That receivership includes an injunction – a court order restraining a person from starting or continuing certain actions against an individual – against third parties, such as the plaintiffs, from pursuing the Brooks defendants.
“In light of that injunction, and at the request of the parties who have appeared in this matter, together with the consent of the Receiver for the Brooks Defendants, this case is hereby removed from the Aiken County active jury trial roster until such time as the Receivership has terminated or for other good cause shown upon motion to this Court,” the document stated.
In the first suit, filed June 13, 2013, Aiken County residents Edward and Cathy Kvartek seek more than $300,000 in judgments against Brooks.
The Kvarteks stated in their complaint that they invested $100,000 in an entity called the Charles Howell Real Estate Trust in February 2012; however, they allege that Brooks never invested the money, but rather converted it to his own use.
The Kvarteks also allege that Brooks offered to sell them an investment known as a “Compass Academy” note, which he said was “safe,” according to the complaint. The Kvarteks invested about $53,800 in that.
Brooks allegedly asked the Kvarteks in March 2013 to lend him $50,000 “for the purpose of repaying another investor in Compass Academy,” and he accepted the combination of cash and check, but never repaid the $50,000.
In the second suit, filed June 20, 2013, Texas resident Stephen Shepard seeks a judgment of $683,000 against the defendants, which Shepard reportedly invested in Compass Academy.
Brooks was arrested last year on charges of securities fraud, forgery and a violation of the Securities Act.
He remains in the Aiken County detention center after allegedly violating the terms of his bond.
Teddy Kulmala covers the crime and courts beat for the Aiken Standard and has been with the newspaper since August 2012.