Clearing firms get hit; Investors, regulators turn to deep pockets for repayment after fraudulent deals.(News)

Crain's New York Business | October 24, 2005| | Copyright

Byline: Aaron Elstein

when the stockbroker who bilked her out of $2.6 million was sentenced this summer to 13 years in prison, Deborah Loeffler felt vindicated. Now the former Vogue model wants restitution, and she knows where to get it--the deep pockets of the big Wall Street firms that processed her broker's trades.

Ms. Loeffler is one of a growing number of investors who are laying siege to one of Wall Street's least known but most profitable lines of work: clearing the transactions of other brokerage firms. The business is dominated by no more than half ...

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