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July 25, 2008 12:15:33 PM CDT

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SEC Opens Subprime Probe

Posted Jun 27, 07 2:17 PM CDT in Business 

(Newser) – The feds are investigating the controversial bundles of financial services that have recently shaken the market and sparked a spate of leveraged buyouts, the Journal reports. SEC chief Christopher Cox told a congressional panel yesterday that "about 12 investigations" were under way into CDOs, shared debt packages reliant on faltering subprime mortgages.

Cox also said the commission is looking into last week's liquidity crisis at two Bear Stearns hedge funds that were heavily backed by CDOs. Bear Stearns announced yesterday that it will be cheaper than expected to bail out the funds, which still owe billions to backers.

Source Wall Street Journal

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Securities and Exchange Commission (SEC) Chairman Christopher Cox, center, and his fellow commissioners, from left, Annette Nazareth, Paul Atkins, Roel Campos and Kathleen Casey, listen to opening remarks...   (Associated Press)
Securities and Exchange Commission (SEC) Chairman Christopher Cox answers a question while testifying on Capitol Hill in Washington, Tuesday, June 26, 2007, before a House Financial Services Committee...   (Associated Press)
Trader Jason Harper, center, rubs his forehead as he works on the floor of the New York Stock Exchange, Friday afternoon, June 22, 2007. Wall Street ended a volatile week with a sharp decline Friday as...   (Associated Press)
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subprime mortgages  • Bear Stearns  • SEC  • hedge fund  • finance  • investigation  • market  • Christopher Cox  • leveraged buyouts  • CDO


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