Former Broker at Credit Suisse Is Found Guilty
A former broker at the Credit Suisse Group, Eric Butler, was convicted on Monday of fraudulently selling millions of dollars in subprime securities to corporate clients.
A co-defendant, Julian Tzolov, 36, had been a fugitive for three months on a $3 million bond, but was captured by authorities in Spain and returned to New York. He pleaded guilty to conspiracy, wire fraud and securities fraud on July 22. He testified as a prosecution witness during the three-week trial.
Mr. Butler, 37, and Mr. Tzolov were indicted last year, charged with conducting what prosecutors said was an illegal scheme in which they had falsely told clients their products were backed by federally guaranteed student loans and were a safe alternative to bank deposits. The products were actually linked to auction-rate securities.
John Nowak, an assistant United States attorney, told jurors in closing arguments that the two ran a high-stakes bait and switch, promising clients one product and delivering another to get higher commissions. Mr. Butler faces a maximum sentence of 45 years in prison.
Mr. Tzolov is awaiting sentencing.
The two men were employed from November 2003 to September 2007 as managing directors in Credit Suisse’s private banking division.
Mr. Butler’s lawyer, Paul Weinstein, told jurors that his client’s customers were “some of the most sophisticated investors in the world” who knew what they were buying.
David Walker, a spokesman for Credit Suisse, said the bank had informed regulators of the fraud in 2007 and had been cooperating with authorities. link.....
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