Two former Credit Suisse Group AG brokers accused of fraudulently selling clients subprime mortgages linked to auction-rate securities were ordered to go to trial on April 27, a U.S. judge said Sept. 26.
Julian Tzolov, 35, and Eric Butler, 36, face securities fraud and conspiracy charges. They are accused of falsely telling clients the products were backed by federally guaranteed student loans and were a safe alternative to bank deposits or money market funds, according to a federal indictment.
The scheme "foisted more than $1 billion in subprime- related securities" upon customers, the U.S. Securities and Exchange Commission said in a complaint filed Sept. 3.
The case is U.S. v. Julian Tzolov and Eric Butler, 08-CR- 370, U.S. District Court, Eastern District of New York (Brooklyn). The SEC case is Securities and Exchange Commission v. Julian Tzolov and Eric Butler, 08-CV-07699, Southern District of New York (Manhattan).
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