Today was “Black Friday” for Brookstreet Securities, as it closed for business. The firm’s 650 independent contractor brokers have been terminated, says Stanley Brooks, President of the firm. Brookstreet clients are left in limbo, many with huge losses in their accounts.
As reported earlier this week, Brookstreet Securities Corp, based in Irvine, California, told its agents that “disaster” had struck and it was in eminent danger of folding. The e-mail communication (previously posted on this site) claimed this was as a result of mark-downs on collateralized mortgage obligation securities (CMOs) by Fidelity’s National Financial Services (NFS), which cleared trades and maintained accounts for Brookstreet.
Some of Brookstreet’s clients report that their accounts continued to fall in value this week. Yet, if they attempted to do anything NFS told them they must to talk to their (Brookstreet) broker, but their broker was not answering the phone. Meanwhile, Some of these clients’ margin accounts slipped into the “red”, meaning not only have these investors’ funds disappeared but NFS now claims the investors owe it money!
Brooks said the firm had a value of about $17 million at the end of May which has evaporated. He said he turned down several tentative offers to recapitalize the firm. “I am flabbergasted,” said Brooks, 59. “My life’s work is gone.”
William S. Shepherd, founder of Shepherd Smith and Edwards a law firm which represents investors nationwide in claims against financial firms states:
“I have met with and had favorable dealings with Mr. Brooks in the past and consider him to be a decent person. I would be surprised to learn he personally cheated his clients. However, there are apparently many Brookstreet investors whose accounts have also ‘evaporated’. Many lost retirement and other savings, meaning their own “life’s work is gone”. These victims likely face a financial situation worse than that of Mr. Brooks.”
We at Shepherd Smith and Edwards have claims pending against Brookstreet Securities, are in the process of filing new claims and are taking steps toward a class action. If you or someone you know has suffered losses, contact us to arrange a free confidential consultation with one of our attorneys.
More information about the situation at Brookstreet Securities