SEC Takes FTN Broker To Court Over Sentinel Fraud

Law360, New York (December 16, 2011, 5:36 PM EST) -- U.S. securities regulators on Thursday hit a former FTN Financial Securities Corp. employee with a suit in Illinois federal court accusing him of aiding Sentinel Management Group Inc. in an elaborate fraud designed to hide its investment of client funds in risky financial products.

Stephen M. Folan, who worked as a broker in FTN Financial's Chicago office, convinced his superiors to engage in repurchase transactions in which FTN bought and then resold to Sentinel roughly $35 million worth of collateralized debt obligations, according to a complaint...
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