Brookstreet reps that had to flee their firm as it collapsed under the weight of millions of dollars in margin calls are still wondering when — or if — they'll see their last paycheck. Oh, and then there's the matter of that unpaid hotel bill.
According to former Brookstreet reps, a total of $5 million in commissions is what the 680 reps have foregone since the collapse of their firm in June. One former rep in La Quinta, Calif., says he's owed $30,000 in commissions for the month of June, one of his best months. But he's particularly bitter since he says he had no involvement in any of the CMO business that brought the firm down. “I've essentially been told that I'm paying for the margin call of someone I don't know,” he says, referring to the greed of the handful of Brookstreet brokers whose margin bets sank the firm.
That same rep claims that Brookstreet reps have also been left holding the bill for a three-night hotel stay during this year's national conference. The Hyatt Regency Resort in Huntington Beach, Calif., has charged the individual credit cards of reps that attended the conference in May, citing a bill totaling roughly $500,000, the rep says. “I was charged $783,” says Gerry Heilpern, a former rep who plans to file a lawsuit against the Hyatt for (among other things) allegedly overcharging him for the stay, and not billing the attendees until more than 30 days after the conference — by which time Brookstreet was no longer a firm and had no money. A public relations spokesperson for the Hyatt Regency Resort would not comment on the matter.