Elderly Should Be Wary of Securities
Mark Tepper, a securities fraud attorney, says that shareholders should be wary of financial products called Collateralized Mortgage Obligations (CMOs) because many of these products are volatile and unsuitable for many investors. AAA ratings and government guarantees do not provide protection to investors who become involved with CMOs. Tepper recently has filed a claim with the National Association of Securities Dealers (NASD.) The claim has been filed on behalf of a Florida widow who used the money from her husband's life insurance policy to invest in a CMO. The CMO went bankrupt soon after it was sold to her and the woman describes the investment as "toxic waste."
Tepper says of CMOs: "Wall Street is dividing CMOs, a type of mortgage-backed security, into several parts or tranches and giving the safe portions to financial institutions like banks while sticking the volatile parts into portfolios of unsuspecting novice or elderly investors. We allege that my client, a recent widow, was defrauded by SAMCO which falsified records with the intent to deceive and sold her a CMO portfolio on margin without proper risk disclosure."
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