Hoezo DownJonesIndex. Lees maar.(En)

Bro­ker­age firm Brook­street Secu­ri­ties Corp. said it may have to shut down in the wake of a severe liq­uid­i­ty cri­sis sparked by loss­es on col­lat­er­al­ized mort­gage oblig­a­tions. ​“Dis­as­ter, the firm may be forced to close …,” the Irvine, Cal­i­for­nia-based com­pa­ny told employ­ees in an e‑mail on Wednesday.

​“It would take a cap­i­tal infu­sion of at least $5,000,000 to keep the com­pa­ny in com­pli­ance with no guar­an­tee that addi­tion­al mark­downs may not be forth­com­ing,” the firm wrote in the sev­en para­graph-long email that details the dis­as­ter that the firms says occurred in one day.

Fideli­ty Invest­ments’ Nation­al Finan­cial unit, which acts as Brook­street’s clear­ing firm, marked down the val­ues of all of Brook­street’s col­lat­er­al­ized mort­gage oblig­a­tions, Brook­street said. CMOs are secu­ri­ties of repack­aged loans that are divid­ed and sold to investors.

​“Many of those accounts were on mar­gin and have suf­fered hor­ren­dous mark­downs and unre­al­ized as well as real­ized loss­es,” the e‑mail said.

On its Web site Brook­street told poten­tial cus­tomers: ​“We use a care­ful, con­ser­v­a­tive approach to busi­ness and to invest­ing” and stressed investors are pro­tect­ed by the Secu­ri­ties Investor Pro­tec­tion Cor­po­ra­tion and Boston-based Fideli­ty. How­ev­er, Brook­street also warned: ​“Cov­er­age does not pro­tect against a decline in the mar­ket val­ue of securities.”