SEC Seeks Order Compelling Broker To Fork Over $6.9M For Selling Investments Tied To Subprime To Elderly, Others

In West Palm Beach, Florida, The Miami Herald reports:

• The Securities and Exchange Commission is asking a federal judge to order Hillsboro Beach securities broker Jamie Solow to pay $6.9 million for ''deceitful conduct'' that ravaged the accounts of his customers and put a firm that employed him out of business. [...] A civil jury in West Palm Beach found Solow liable late last month for running a fraudulent trading scheme in which he racked up huge commissions selling complex investments known as inverse floating collateralized mortgage obligations (CMOs).

• Solow's nine-day trial focused attention on a less-publicized aspect of the nation's expanding credit crisis -- the many average investors who lost big money after putting their retirement savings into volatile mortgage-related securities. Regulators have said such investments are only suitable for sophisticated investors who understand the risks. At trial, government prosecutors presented evidence that Solow, 46, used deception to peddle millions of dollars of those risky, mortgage-backed bonds to hundreds of retail clients looking for safe investments for their retirement accounts. Investors such as Tony Stevens, 81, of Sunrise, lost their entire life savings.

For more, see SEC wants broker to pay $6.9M for fraud (Government lawyers want a U.S. judge to throw the book at a South Florida stockbroker who preyed on the elderly while running up millions of dollars in commissions) (if link expires, try here).

For earlier Miami Herald story, Jury: Stockbroker liable for fraud scheme (The SEC said it will ask a judge to take steps to kick a Hillsboro Beach stockbroker out of the securities industry).