Friday, May 29, 2009

SEC Goes After Bad CMO Salesmen from Shuttered Firm

The SEC announced it "charged 10 brokers with fraud for falsely marketing investments in derivatives of mortgage-backed securities as safe and suitable for retirees and others with conservative investment goals. The independent contractor brokers worked for BrookStreet Securities, which went out of business in June 2007.

Isn't it amazing how firm's offering horrible quality products, declare bankruptcy and shutter the organization? How many beef makers close after a large E Coli recall? What about the salmonella peanut butter firm?

Now we have a long ago closed Brookstreet. They didn't act alone. Someone packaged the Collateralized Mortgage Obligations. Was it Goldman Sachs, Lehman Brothers or another former Wall Street investment banker? They were responsible for due diligence. That's for another day, if ever. It's the dirty brokers turn for justice.