The Financial Industry Regulatory Authority fined Brookstone Securities of Lakeland, Fla., $1 million and ordered $1.6 million in restitution for allegedly selling collateralized mortgage obligations to elderly, retired and unsophisticated investors claiming they were safe investment vehicles.

In the final decision, the securities firm did not acknowledge or accept responsibility for its alleged misconduct.

FINRA also imposed some of those financial burdens on the company's owner and CEO Antony Turbeville as well as broker Christopher Kline. The two were also barred from the securities industry.

FINRA claims that from July 2005 through July 2007, Turbeville and Kline made fraudulent misrepresentations and omissions to elderly and unsophisticated customers about investing in collateralized mortgage obligations.

The securities regulator claims the investors were assured that the CMOs were government-backed bonds, generating 10% to 15% in returns. The pair in a two-year period made $492,500 in profits.

kpanchuk@housingwire.com