Two former Credit Suisse brokers each face a $5m fine and up to 20 years in jail after being charged with fraudulently selling complex US securities to clients in order to boost their commissions, according to The Times.
Julian Tzolov, 35, and Eric Butler, 36, were indicted in a federal court in Brooklyn and stand accused of secretly switching clients investments’ from bonds backed by student loans to bonds backed by pools of mortgage securities, known as collateralised debt obligations (CDOs).
Between November 2004 and August 2007, the two allegedly made more than $1bn worth of unauthorised purchased of securities backed by home loans.
THE US ECONOMY is facing negative headwinds stronger than those it experienced during the recession of the early 1990s, according to one of the country's leading central bankers, The Telegraph reports.
Eric Rosengren, president of the Boston Federal Reserve, believes that those headwinds - a result of the continuing sub-prime crisis - have not subsided as had been hoped.
Mr Rosengren, who sits on the Fed's powerful interest rate setting committee, painted a grim picture of the state of the US economy, saying that the liquidity crunch has now morphed into a full-blown credit crunch, with the woes of the financial sector spreading through other parts of the system.IFAonline
Lasting power of attorney
Three risk profiles
Caused by falling oil price
Roger Marsden takes over on interim basis
Will face 'appropriate action'