Alison Ford Dyer and Doug Dyer
One of the investors who was a loser in an investment scheme recently halted by the Securities and Exchange Commission said one of the Chattanooga brokers involved made many of his contacts through the Chattanooga Quarterback Club.
Paul Smith, former Hamilton County Democratic Party chairman, said Doug Dyer has been the president for many years of the club that promotes UTC and UT athletics.
The SEC announced late last week that it had won a court-ordered asset freeze to halt "an ongoing fraud by two former Chattanooga brokers with disciplinary histories who allegedly raised more than $5 million from investors without using the money as promised." One was the 56-year-old Dyer and the other was James Hugh Brennan III, 67.
The SEC said Dyer and Brennan sold purported shares in eight similarly named companies to more than 240 investors nationwide since 2008 without ever registering the stock as they promised. Instead, according to the SEC’s complaint, Brennan and Dyer transferred investor funds into their personal accounts or those belonging to their wives.
The action says over a five-year period that Carole Johnston Brennan received $30,000 of the funds and Alison Ford Dyer received $286,000. Ms. Dyer was also active in the Quarterback Club and would send out Facebook notices about the meetings.
Mr. Smith said he was approached by Mr. Dyer, a McCallie and UTC graduate, at a club meeting about an investment opportunity. He said he signed up and was given printed shares from Broad Street Ventures after a meeting at the Dyer office on Broad Street.
Mr. Smith said, "He was always nicely dressed and likable. You don't think about checking up on somebody like that. Nobody checked his credentials."
The SEC said Brennan was banned from the brokerage industry and Dyer suspended and fined for executing unauthorized transactions in customers’ accounts.
Mr. Smith said it was promised repeatedly that the investment would be properly registered and begin producing income, but he said it never took place.
"I kept calling and calling, and he kept saying there had been some holdup but it was going to happen," Mr. Smith said.
He said with the constant delays, "We all became suspicious."
Then he said an FBI agent came to his home several months ago and told him he had been the victim of a swindle. "She said they had been putting money in their pockets - not investing it."
Mr. Smith said among the investors was his longtime friend and associate, the late Senator Ward Crutchfield, who put both some of his personal money and leftover campaign funds in the pool.
He said the amounts invested were not small. "He would not even talk to you for less than $50,000."
He said the club president "fleeced some of the most philanthropic people in the city."
Mr. Smith said the Quarterback Club president at the meetings "came in contact with some of the richest people in Chattanooga. Also, he made contact with some people who came to speak who are nationally known."
Mr. Smith said, "The greatest tragedy of this is not the money I and many others lost, but the loss to the university programs. This took money out of helping the schools and many other charitable groups."
Paul Smith