ARS fraud leads to arrests
Today, two former brokers are facing criminal charges of fraud and conspiracy.
Eric Butler and Julian Tzolov, both formerly of Credit Suisse, are accused of misleading investors about the asset-backing of auction rate securities.
The accused told investors that their ARS investments were backed by federally guaranteed student loans instead of subprime mortgages. Wow.
At least 40 firms are under investigation for marketing auction rate securities as a safe alternative to cash. Several firms have settled with regulators. Some have also agreed to buy back the questionable securities from investors who were stuck with illiquid bonds after the market dried up in February.
Wouldn’t this make for a good episode of Law & Order?
Tags: auction rate securities, conspiracy, credit suisse, fraud, subprimeRelated Stories
POSTED IN: Corporate, Investment, Market, News
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