[JURIST] Former Credit Suisse broker Eric Butler was convicted Monday of multiple counts of fraud and conspiracy in the US District Court for the Eastern District of New York [official website]. His co-defendant Julian Tzolov pleaded guilty [JURIST report] last month and testified against Butler. Butler and Tzolov are accused [complaint, PDF; JURIST report] of defrauding clients out of more than $400 million by selling high-risk, mortgage-backed securities to clients who requested low-risk investments, in violation of the Securities Exchange Act of 1934, the Securities Act of 1933, and other SEC regulations [text]. Butler faces up to 45 years in prison. Both Butler and Tsolov will be sentenced October 27.
In light of the numerous acts of financial fraud that have been reported, the Obama administration has made protecting consumers a top priority. Last month, Securities and Exchange Commission chairperson Mary Schapiro pledged policy changes [JURIST report] that would improve the odds of preventing investment fraud. In May, the House of Representatives passed the Senate version [JURIST report] of the credit card holders' bill of rights, which the president signed the following day [press release]. Just two days prior, Obama signed [JURIST report] the Fraud Enforcement and Recovery Act, strengthening criminal laws against financial fraud.