Two former Credit Suisse brokers, Julian Tzolov and Eric Butler face up to 20 years in prison for allegedly misleading clients. Instead of selling student loan backed Auction Rate Securities, as promised, they sold mortgage backed securities, then falsified emails to make it seem as though they were selling the student-loan backed ARSs. Butler is in custody. Tzolov is on the lam.
Bloomberg: Two former Credit Suisse Group AG brokers were charged with conspiracy, securities and wire fraud linked to a scheme to fraudulently sell subprime securities to corporate clients.
Julian Tzolov, 35, and Eric Butler, 36, falsely told clients the products were backed by federally guaranteed student loans and were a safe alternative to bank deposits or money market funds, said Robert Nardoza, a spokesman for Brooklyn U.S. Attorney Benton Campbell.
“The defendants’ fraudulent misrepresentations and ‘bait and switch’ tactics saddled investors with unknown risks they did not bargain for,” said Campbell in a statement. “Those who engage in such schemes will be aggressively investigated, prosecuted and held to account for their criminal activity.”
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