Broker Flees as Investigation Heats Up

Federal Prosecutors believe that a Wall Street broker suspected of illegally selling mortgage-related securities has left the U.S. and may have fled to his native Bulgaria.

Prosecutors are preparing to bring criminal charges in a high-profile probe into the activities of two former Credit Suisse brokers, according to The Wall Street Journal.

Authorities are looking into whether Eric Butler and Julian Tzolov, who is Bulgarian-born, lied to investigators about auction rate securities tied to subprime mortgages.

Kenneth Breen, a lawyer for Tzolov and Paul Weinstein, a lawyer for Butler, declined to comment. Credit Suise said in a statement that the brokers were suspended last year as soon as the firm found out about the “prohibited activity.”

This investigation is one of many stemming from the $300 billion market crash of the securities market. New York Attorney General Andrew Cuomo filed a civil suit against UBS, accusing them of a “multibillion-dollar consumer and securities fraud.” The suit demands that UBS pay damages. This Credit Suisse case continues to probe into questionable broker activities.