FINRA recently announced that Andres Luis Delmas, in Miami, Florida, has been fined $15,000 by FINRA and suspended from association with any FINRA member firm in any capacity for 60 days. Without admitting or denying, Andres Delmas consented to findings that he made unsuitable recommendations to customers to buy inverse floater Collateralized Mortgage Obligation (CMO) securities. The findings further stated that Delmas did not have reasonable grounds to believe that the CMO’s were suitable for the customers in light of their investment experience, objectives and risk tolerances. Finally, FINRA’s findings indicate that Delmas’ customers lost more than $163,000 as a result of these unsuitable inverse floater CMO investments.
A collateralized mortgage obligation (CMO) is a financial debt vehicle that was first created in June 1983 by the investment banks Salomon Brothers and First Boston for Freddie Mac.
Legally, a collateralized mortgage obligation is a special purpose entity that is wholly separate from the institution(s) that create it. The entity is the legal owner of a set of mortgages, called a pool. Investors in a CMO buy bonds issued by the entity, and receive payments according to a defined set of rules. The mortgages themselves are called the collateral, the bonds are called tranches (also called classes), and the set of rules that dictates how money received from the collateral will be distributed is called the structure. The legal entity, collateral, and structure are collectively referred to as the deal.
If you questions about investments you made with Andres Luis Delmas or in Collateralized Mortgage Obligations, or if you believe that you have been the victim of a securities fraud, the Law Offices of David A. Carter, P.A. may be able to help. The Law Offices of David A. Carter, P.A. is a South Florida securities fraud, securities arbitration, investor protection, and Chapter 7 bankruptcy law firm based in Boca Raton. David Carter is a securities attorney that reviews securities fraud cases throughout the country and Florida, including securities cases in Orlando, Jacksonville, Tampa, Tallahassee, Gainesville, and West Palm Beach. To contact the Law Offices of David A. Carter, P.A., please call 561-750-6999, or email us at contact@carterpa.com. For more information about the Law Offices of David A. Carter, P.A., you can also visit our website at www.carterpa.com.