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December 8, 2009

SEC Files Securities Fraud Lawsuit Against Brookstreet Securities of Irvine, California

Today, the SEC charged California-based Brookstreet Securities with securities fraud over the sale of riskly and unsuitable mortgage-backed securities, known as Collateralized Mortgage Obligations (CMOs), to conservative investors, many of them seniors and retirees who were financially destroyed. According to the SEC, Brookstreet sold approximately $300 million worth of CMOs to its customers between 2004-2007 even though the firm knew, or should have known, that the CMOs were unsuitable.

The SEC is seeking injunctive relief and disgorgement of all ill-gotten gains plus prejudgment interest from the firm plus financial penalties against the firm's President Stanley Brooks. Brookstone customers who were victims of the firm's CMO program also have the option of pursuing a securities arbitration claim against Brookstone to recover their finanicial losses.