Stock Scam Easy Money?

Frank D. Gruttadauria, 45, of Gates Mills, Ohio is seen in this undated photo. Gruttadauria, a stockbroker who reportedly admitted stealing from investors who lost $100 million when their brokerage statements were falsified, is being sought by the FBI. AP

For more than a decade, 86-year-old Golda Stout of suburban Chicago kept close track of her investments.

But on Tuesday she found out all the numbers add up to almost nothing; most of the money she thought was in her portfolio is missing, along with her broker, reports CBS News Correspondent Cynthia Bowers.

"I don't have this stock, they're gone. Where? How? I didn't sell them, I didn't get the money," said Stout.

Her son Ronald Stout is now going over her statements -- statements that appeared to show his mother's investments had grown substantially.

"It listed just over two-and-a-half million dollars in net assets and when we actually finally got Lehman Brothers to tell us they said it was in the 80- thousands," said Ronald Stout.

The Stouts and dozens of other Lehman Brothers investors were left short when broker Frank Gruttadauria disappeared nearly three weeks ago. It's believed he siphoned off as much as $300 million by hiding his clients' real statements and replacing them with false ones.

Gruttadauria, who worked for Lehman Brothers in Cleveland, has actually admitted stealing over a 15-year period. Before disappearing, he left a letter with the FBI in which he apologized, but blamed "the various firms' greed and lack of attention" for making it easy.

Lehman Brothers will not comment on this case, but at least one expert believes the firm should be liable for the losses.

"There's no question they were asleep at the wheel," said securities attorney Andrew Stoltman. "This was a pretty elaborate in there were fake, bogus account statements being created, there was a PO box being used, Lehman Brothers should have caught this."

But no one did, and now the whereabouts of Gruttadauria and the millions of dollars are a mystery.

"He's somewhere in this world probably sitting on a beach enjoying a nice drink and laughing at all of us," said Ronald Stout.

But Golda Stout is not laughing, and she's no longer tracking the market. Having lost so much so quickly, she just doesn't see the point.



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  • CBSNews.com staff CBSNews.com staff

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