Wall St firms subpoenaed by NY prosecutors: source

[babylonsister]

Source: Reuters

Wall St firms subpoenaed by NY prosecutors: source
Wed Dec 5, 2007 10:54am


NEW YORK (Reuters) - New York state prosecutors have sent subpoenas to Wall Street firms seeking information related to the packaging and selling of debt tied to high-risk mortgages, a person familiar with the matter said.

The subpoenas, sent by the office of New York Attorney General Andrew Cuomo, requested information from a host of Wall Street firms, including Merrill Lynch & Co, Bear Stearns Cos and Deutsche Bank AG, The Wall Street Journal reported, citing unnamed sources.

Spokesmen for Cuomo, Deutsche Bank and Merrill Lynch declined to comment. A spokesman for Bear Stearns was not immediately available for comment.

The investigation is examining how adequately investment banks reviewed the quality of mortgages before packaging them into products that were then sold to investors, the sources told the Journal. The subpoenas also requested information about how the debt was pooled into securities, including the banks' relationship with credit-rating firms, they said.

more...

Read more: http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2007-12-05T155410Z_01_N05612513_RTRUKOC_0_US-SUBPRIME-CUOMO.xml

[havocmom]

1. Excellent! Time to get more attention to the fact that investors get hit in all this

Too many think it is just the banks/mortgage lenders who are being hurt. They are probably the parties LEAST hurt in this fiasco. They made the shaky loans, raked in the associated fees from borrowers, then made a commission by selling the trash paper to funds and private investors.

Investors and investor funds end up owning all the bad debt. While some are fat cats who can take the hit better, many are small investors, trying to make their wee bit of investment income grow to support them in their old age.

The same folks seeing whole neighborhoods loose property value due to abandoned, uncared-for foreclosed homes are some of the folks hit with holding the empty bags of loans that should never have been made to begin with.

Middle class and working class folks who lived frugally so they could scrape together a bit of investment capital, rely on fund managers who take the money and invest it broadly. They are now paying for all the big bucks the predatory lenders put in their own pockets before the crash.

[Acadia Blue]

2. The only people repubs care about are rich corporations and

their ultra rich buds.

[havocmom]

3. bush*s self admitted base: The Haves & The Have Mores

Everyone in the US should watch that scene from Moore's film on a continuous loop until it sinks in.

[Robbien]

4. What has happened here is outright fraud

From the issuance of iffy mortgages, to the multiple layers of leveraged debt added on, to the hedge fund bets, to the bundling of investments and the shipping of these assets off bankers books and the massive trading done in offshore accounts.

Fraudulent. All of it.

But everyone is blaming the subprime mortgage holder.

[PassingFair]

5. Is it fraud if everyone KNEW what was really going on?

Everyone contributed cards to the house.


Now they're SHOCKED, shocked, I tell you, to find FRAUD!

[bemildred]

6. A Ponzi scheme is what it is.

Large portions of out economy are Ponzi schemes these days, or government sanctioned monopolies, or both.

[The Backlash Cometh]

7. !

I'm not believing it. Sounds like someone is on the ball.