SEC Hits Brookstreet, CEO With Fraud Suit Over CMOs

Law360, New York (December 9, 2009, 12:10 PM EST) -- The U.S. Securities and Exchange Commission has accused defunct brokerage firm Brookstreet Securities Corp. and its CEO of marketing more than $300 million in mortgage-backed securities to retirees and other unsuitable investors.

On Tuesday, the SEC filed the civil fraud suit against Brookstreet and President and CEO Stanley C. Brooks, 61, in the U.S. District Court for the Central District of California.

According to the regulator, Brookstreet and Brooks sold illiquid collateralized mortgage obligations to unsuitable customers such as retirees and others looking for conservative investments....
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