SEC Charges 2 Wall Street Brokers in $1B Subprime Fraud

[jjl]

Here are the 2 Brokers that have created this entire real estate and financial melt-down.

If they couldn't sell these loans - then there were no buyers.
If there were no investors to buy these loans -
they wouldn't have been sold to homebuyers (at least in the numbers that they were).


SEC Charges Two Wall Street Brokers in $1 Billion Subprime-Related Auction Rate Securities Fraud
FOR IMMEDIATE RELEASE
2008-187

Washington, D.C., Sept. 3, 2008 — The Securities and Exchange Commission today charged two Wall Street brokers with defrauding their customers when making more than $1 billion in unauthorized purchases of subprime-related auction rate securities. The SEC's Division of Enforcement in 2007 formed a subprime working group, which is aggressively investigating possible fraud, market manipulation, and breaches of fiduciary duty that may have contributed to the recent turmoil in the credit markets.

The SEC alleges that Julian Tzolov and Eric Butler misled customers into believing that auction rate securities being purchased in their accounts were backed by federally guaranteed student loans and were a safe and liquid alternative to bank deposits or money market funds. Instead, the securities that Tzolov and Butler purchased for their customers were backed by subprime mortgages, collateralized debt obligations (CDOs), and other non-student loan collateral.

Rest of press release...