In a crackdown on penny stock fraud, the government has accused 10 brokers of intimidating, high-pressure telephone sales tactics to coax consumers into buying risky securities.

The brokers' strategy often included telling unwary investors they had "inside information" about a stock, according to the suit filed by the Securities and Exchange Commission.The suit, filed in Manhattan federal court, seeks an injunction to stop the brokers from further illegal activity and the repayment of some $1.4 million in losses suffered by victims.

The SEC also hopes to recoup commission income totalling more than $270,000 from the approximately 60 defrauded customers.

All of the brokers at one time worked in the Garden City, N.Y., office of the penny stock firm of J.T. Moran & Co., which went out of business in January following extensive investigation by authorities.

Penny stocks are low-priced securities, often selling for less than $1 a share, which are traded on the over-the-counter market.

The stocks are issued by companies with short or erratic financial histories, and their prices are highly volatile. The stocks also are hard for consumers to track because they are not traded on major exchanges, nor are their prices reported in newspapers.

The brokers named in the suit allegedly used a variety of techniques, from 1986 to the present, to convince consumers to buy stocks in companies that were "unseasoned with poor earnings," said Martin Kuperberg, associate regional director of the SEC's New York office.

He said sometimes the brokers would tell customers they had "inside information" that would cause the stock to soon rise.

They also would tell customers "I've never lost money for anybody" or "You have to act quickly or you'll miss out," he said.

Prior to working at Moran, many of the accused brokers worked at other now-defunct penny stock firms, including First Jersey Securities, Sherwood Capital and Stuart-James Co., all of which have been investigated for allegedly illegal sales techniques.

Kuperberg explained that once such a firm is shut down, the same brokers often appear at a different one.

"Just because they're not doing business today, does not mean they won't be doing business tomorrow," he said.