There’s a new trend among the stockbroker set: screw your clients and flee the county! From the WSJ:
Federal prosecutors suspect that a Wall Street broker who is the target of a criminal investigation into sales of mortgage-related securities has left the U.S. and could have fled to his native Bulgaria, according to people familiar with the case.
…Authorities have been investigating whether the brokers — Eric Butler and Julian Tzolov, who is Bulgarian-born — lied to investors about how they placed their money in so-called “auction rate” securities tied to subprime mortgages, the people say.
Credit Suisse quickly said the brokers were suspended as soon as the firm had detected their “prohibited” activities (lying to clients?T he pair allegedly misled clients by encouraging them to buy auction rate securities that they said were backed by student loans, but were actually backed by (surprise!) subprime mortgages.). Of course, they just went across the street to Morgan Stanley, which employed them until it learned about the criminal investigation.
It’s unclear if Mr. Tzolov could be extradited for securities fraud under the current extradition treaty with Bulgaria. But under the terms of a new treaty that could be ratified by September, he almost certainly could be.
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