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North Carolina's SECU Responds to Brokerage Account Complaint

A case involving a widow who opened up a brokerage account with the defunct, CU-formed XCU Capital LLC, its shell later bought by State Employees' Credit Union, is in the middle of a regulator and legal quagmire.

By Michelle A. Samaad | Updated on January 17, 2011

A case involving a widow who opened up a brokerage account with the defunct, CU-formed XCU Capital LLC, its shell later bought by State Employees’ Credit Union, is in the middle of a regulator and legal quagmire.

The New York Times first reported on the story of Helen Cohen, a widow, now deceased, who bought an investment account from what it says was SECU in September 2005. A broker suggested Cohen buy a real estate investment with a company that owned a Florida apartment complex. According to the article, Cohen could make a tax-free exchange of an apartment building that she owned for 30 years and defer capital gains on the sale. Cohen invested $1 million but a trustee later discovered that the apartment complex was financed with an interest-only loan and other factors that might result in a significant loss.

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