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SEC Charges Brokers With Subprime Fraud

WASHINGTON -- The Securities and Exchange Commission has charged five Los Angeles brokers with securities fraud, alleging that from 2005 through 2007, the brokers convinced their customers to refinance their homes with subprime mortgages so that the brokers could sell their clients unsuitable securities.

By Staff Writer | Updated on October 08, 2008

WASHINGTON — The Securities and Exchange Commission has charged five Los Angeles brokers with securities fraud, alleging that from 2005 through 2007, the brokers convinced their customers to refinance their homes with subprime mortgages so that the brokers could sell their clients unsuitable securities.

Guillermo Haro, Kederio Ainsworth, Jesus Gutierrez, Gabriel Paredes and Angel Romo persuaded their clients–most of whom did not speak English and who lacked the money to buy the securities –to make the investments by refinancing their fixed-rate mortgages into subprime adjustable-rate negative amortization mortgages, the SEC said in a written statement.

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