Andrew Coffey brings on John Gittleson from the Orange County Register who broke the story on the BD firm Brookstreet Securities Corporation who went from $17 million plus to minus $17 million within one week. What happened? Basically, this brokerage firm invested in some marginal CMO bonds that turned into negative equity that accellerated their net deficits and the next thing you know, their in the hole…upside down…minus milli-megabucks, forcing Brookstreet to liquidate all assets, layoff 105 employees and inform over 650 reps of the devastating hit. The affected accounts were carried by National Financial, Fidelity Investments and all client assets are safe. I guess they’ll have to change their name to BROKESTREET.
Tune in Monday as MN1 follows this story as it evolves.