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SEC charges brokers with Collateralized Mortgage Obligation fraud
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by CynicalPatriot | May 29, 2009 at 09:03 am
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In a lawsuit filed yesterday in the US Southern District Court of Florida, the SEC alleges the brokers presented the CMOs as suitable products for retirees and conservative investors. In some cases, the CMOs were also mis-represented as being guaranteed by the US government. The SEC claims that – contrary to what the brokers represented – the investments were in fact illiquid and suitable only for sophisticated investors seeking high-risk products.
Furthermore, the brokers are accused of heavily margining customer's accounts, resulting in losses of more than $36 million. Between 2004 and 2007, the brokers are alleged to have defrauded more than 750 customers, while reaping a total of $18 million in commissions for the sales.
"These brokers disguised the risks of investing in these derivatives of mortgage-backed securities, exposing their customers to substantial losses. They disregarded their customers' needs, and used deceptive and misleading tactics
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CynicalPatriot
Minneapolis, Minnesota, United States
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at 21:25 on May 29th, 2009
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Lots of people now are in to deceiving others and take advantage on the trust given to them just to earn money for themselves. The recent incident of fraud is about Kevin Trudeau who is an American author and billionaire. He is also the pocket billiards promoter (he even founded a tournament) and an alternative medicine advocate. However, Kevin Trudeau has been busted again. The oft star of late night infomercials has been busted – again – for fraud. It isn't the first time. He spent several years in prison, for fraud, and his products, books, and claims lacking scientific proof have been repudiated by the Federal Trade Commission every time he makes a claim about anything. His weight loss cure was ridiculous and medically unsound, the vitamins he hawks don't work, and hopefully no one went running to payday lenders to buy his snake oil. He's been slapped with a $37 million fine thanks to a 2005 lawsuit. It looks like Kevin Trudeau has some credit repair to do, if that quack had any in the first place.