Brookstreet CEO Ordered to Pay $10 Million in Securities Fraud Case

by Wall Street Fraud on March 13, 2012

Philadelphia Investment fraud attorneyA federal judge has ordered the former head of Brookstreet Securities Corp. to pay $10 million penalty for his role in a securities fraud case related to the financial crisis.  According to the SEC, former CEO, Stanley C. Brooks, and his company systematically sold risky mortgage-backed securities to customers with conservative investment goals.

Brookstreet and Brooks created a program through which the firm’s registered representatives sold particularly risky and illiquid types of Collateralized Mortgage Obligations (CMOs) to more than 1,000 seniors, retirees, and other unsuitable investors, the SEC stated. The SEC further alleged that Brookstreet and Brooks continued to promote and sell the risky CMOs even after receiving repeated warnings that the high-risk investments could lose their value overnight.

The securities fraud ultimately led to severe investor losses and the firm collapsed in the wake of the financial crisis.

“Brooks’ aggressive promotion and sale of risky mortgage products to seniors and other risk-averse investors deserves the maximum penalty possible, and that is what he got,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Those who direct such exploitative practices from the boardroom will be held personally accountable and face severe consequences for their egregious actions.”

In addition to the case against Brooks, the SEC separately is awaiting a decision in another Brookstreet-related enforcement action pending in Florida. In that case, the SEC charged 10 former Brookstreet registered representatives with making misrepresentations to investors in the purchases and sales of risky CMOs. Two representatives settled the charges, and the SEC tried the case against the remaining eight representatives in October 2011.

If you have been the victim of securities fraud or negligence, we may be able to help you recover your losses. Contact us today at 215-839-3953 for a free consultation.

At Wall Street Fraud, we are dedicated to offering assistance to those who have been hurt by improper corporate or investment practices.

If you have been the victim of stock brokerage fraud, securities fraud, mutual fund fraud, stockbroker fraud, annuities fraud, or any other type of investment fraud or negligence, please contact us today for a free case evaluation. Our talented and aggressive legal and professional staff is eager to help you recover your losses.

Leave a Comment


Spam Protection by WP-SpamFree

Previous post:

Next post: