Miller & Milove represents conservative investors defrauded by a mortgage backed bond trading scheme perpetrated by Brookstreet Securities with illegal margin financing and misleading pricing information provided by National Financial Services (NFS), a wholly owned subsidiary of Fidelity Investments. Brookstreet Securities brokers were lead to believe that investments managed by Clifford Popper out of the Boca Raton office involved safe AAA rated Government Bonds. The brokers in turn convinced clients to invest in what were believed to be safe income investments, when in fact the investments were the riskiest and most volatile types of mortgage derivative financial instruments. Some of the purported mortgage related income securities sold to the Brookstreet clients were distributed into the markets by Bear Stearns and Lehman Brothers.

In June 2007 Irvine, California based Brookstreet Securities ceased operations pursuant to the Order of the California Department of Corporations following margin calls by NFS/Fidelity on wrongfully margined CMOs that plunged Brookstreet into net capital violations and caused Brookstreet to close. Hundreds of brokers lost their jobs and clientele and customers lost millions of dollars.

The Popper and NFS CMO Program included the offer, sale and margin financing of toxic CMO derivatives and residuals, such as Inverse Floaters and Interest Only (IOs) and ultra-risky structured financial instruments to conservative or retired Retail account holders of defunct Brookstreet Securities. FINRA has for many years warned industry members that these types of mortgage derivative securities should NOT be sold to retail investors. FINRA has recently announced investigations, censures and sanctions of industry members participating in margined and retail sales of IOs and Inverse Floaters to retirees, income and conservative investors. These are the same types of unpredictable, risky and toxic securities that caused the bankruptcy of Orange County, California in the 1990s and are a root cause of the ongoing meltdown of the U.S. and world financial markets.

The fraudulent CMO program was orchestrated and run out of Brookstreet’s Boca Raton, Florida branch office by Clifford Popper, Stephanie Dow, Alexander Dickson, William Betta and others and supported by the substantial participation of National Financial Services/Fidelity pricing and margin department personnel. NFS used “notional pricing” that was inappropriate for retail investor account statements and then profited from excessive margin lending on toxic mortgage derivatives, generating millions of dollars in margin charges.
This scheme is similar to the fraudulent securities program run by Jamie Solow, a former broker with Florida based broker dealers SAMCO and Archer Alexander. The Securities and Exchange Commission recently successfully prosecuted Solow in a Florida Federal Court and the FINRA regulatory agency has permanently barred other broker participants from the securities industry. Prior to joining Brookstreet Securites, Popper, Dow and Dickson worked with Jamie Solow in various Florida Retail securities firms in the Boca Raton-Ft. Lauderdale region.
The offer and sale of Mortgage Securities and derivatives to Retail Investors on margin utilizing prices based on assumptions and guestimates is an example of the abusive practices of Wall Street that have caused devastating damages to investors and undermined investors confidence in the United States financial markets.

Miller & Milove continues the investigation into the unlawful Brookstreet Securities and NFS/Fidelity activity and encourages anyone with personal knowledge of the facts and circumstances of this matter to contact us on a confidential basis.