Maine securities watchdog probes Portland-based undersea treasure hunter

Posted April 14, 2014, at 6:21 p.m.
Last modified April 17, 2014, at 3:28 p.m.
Greg Brooks
Sub Sea Research
Greg Brooks

PORTLAND, Maine — An embattled Portland-based treasure hunter facing legal action from investors, a supplier and the British government is now under scrutiny from state regulators.

The Maine Office of Securities announced Monday afternoon that it is seeking information from firms and people approached to invest in companies owned by Greg Brooks, whose high-profile effort to find what he believes to be a treasure-laden sunken freighter has generated ample media attention but no return for investors.

Judith Shaw, the state’s securities administrator, said she could not disclose what prompted the state’s request, but that her office is “aware of Mr. Brooks’ efforts and we’re interested in learning more about them.”

The major function of her office is investor protection and prosecuting violations of securities laws.

Attorney Jay McCloskey, representing Brooks, said his client’s companies have provided information about their business and investors in response to a request from the state office.

McCloskey said the state office’s solicitation for input is complicated by two pending federal cases against companies operated by Brooks.

“There are competing financial interests and those interests may influence their comments,” McCloskey said.

Brooks and his companies are involved in two lawsuits in federal court, one from a firm claiming Sea Hunters did not pay for a remotely operated vehicle. The other matter is connected to a salvage claim Sea Hunters filed in U.S. District Court in Portland, which has been challenged by the British government and a group of dissatisfied investors organized as Mission Recovery, who want rights to salvage the ship.

Brooks’ companies operated by the names Sea Hunters, Sea Hunters 2 and Deep Sea Hunters. A group led by New York investor Daniel Stochel also has challenged Brooks’ ability to salvage the ship in court. Stochel asked to become the sole salvager of the shipwreck site in a September 2013 court motion.

Brooks, who owns the vessel Sea Hunter, aimed to recover treasure he valued at $3 billion from the 500-foot Port Nicholson. He told investors that he believed the vessel was carrying 30 crates filled with platinum ingots, as well as gold and jewels, when a German submarine torpedoed it in 1942 about 50 miles northeast of Provincetown, Mass. He has not recovered the treasure.

As of December 2013, Brooks had raised an estimated $10 million from investors — and spent $8 million of that sum, according to The Cape Cod Times. The newspaper also reported that Brooks told investors in a May 2013 letter that he needed another $3 million to complete his search for the sunken treasure.

The Maine Office of Securities has asked anyone approached to invest by Brooks or representatives of his companies to call 877-624-8551.

CORRECTION:

A previous version of this story misstated the British government’s involvement with Sea Hunters’ claim to the S.S. Port Nicholson. The British government responded to and contests Sea Hunter’s claim to salvage the ship, filed in U.S. District Court. The government did not bring a lawsuit against the company.

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