Former Credit Suisse Group AG broker Eric Butler was convicted Monday of fraudulently selling millions of dollars in subprime securities to corporate clients.
Butler was found guilty on all three counts after two hours of jury deliberations. Testimony in his trial began July 23 before U.S. District Judge Jack B. Weinstein in Brooklyn, N.Y. Co-defendant Julian Tzolov, who fled securities-fraud charges and was returned to New York from Spain on July 20, pleaded guilty to conspiracy, wire fraud and securities fraud July 22. He testified as a prosecution witness.
Butler and Tzolov were indicted last year, charged with conducting what prosecutors said was an illegal scheme in which they falsely told clients the products were backed by federally guaranteed student loans and were a safe alternative to bank deposits or money market funds.
Tzolov, who is awaiting sentencing, was a fugitive for three months after fleeing prosecution in May while free on $3 million bond. He was arrested July 15, just outside Marbella, accompanied by a bodyguard and carrying false documents, Spanish authorities said.
Butler was found guilty of conspiracy to commit securities fraud, securities fraud and conspiracy to commit wire fraud. He could be sentenced to up to 20 years in prison on the most serious count.