Wednesday, December 9, 2009

Brookstreet and the CEO charged with fraud

According to Reuters, Stanley Brooks, former President and Chief Executive of Brookstreet group have been charged with fraud. They promoted risky mortgage securities to customers after they were warned that the securities were dangerous, illiquid and inappropriate for retail investors.

A statement from Robert Khuzami, director of the SEC's Division of Enforcement, said:
"These were complex mortgage derivative securities with byzantine pricing, valuation and trading characteristics. Selling them to retirees and conservative investors was profoundly and egregiously wrong."

Read more here.

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