Cuomo Subpoenas 8 Major Banks Over Possible Fraud Related to Credit Rating Agencies
Tweet
Share
E-mailGet Alerts GS Hot Sheet
Join SI Premium – FREE
According to a NYTimes article today, eight major world banks are being investigated by New York Attorney General Andrew Cuomo for possibly misleading ratings agencies about the quality of certain mortgage-backed securities.
Sources familiar with the situation have told the publication that Cuomo has issued subpoenas to these banks over, specifically, whether they provided false information to the ratings agencies in order to gain higher ratings on the toxic debt prior to the financial meltdown.
The banks include Goldman Sachs Group (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Credit Suisse (NYSE: CS), Deutsche Bank AG (NYSE: DB), UBS AG (NYSE: UBS), Credit Agricole and Merrill Lynch. The ratings agencies that may have potentially been duped by the banks include Standard & Poor’s, Fitch Ratings and Moody’s Investors Service (NYSE: MCO).
Cuomo has not announced any official investigation and the banks declined the New York Times’ request for comment.
This new wave of investigations comes at a time when major Wall Street banks, including Goldman and Morgan Stanley, are facing investigations from the Securities and Exchange Commission and the Justice Department over allegedly misleading clients over the same toxic mortgage debt.
One the the biggest controversies to come out of the financial crisis was the high-ratings that the agencies had placed upon extremely risky securities.
JPMorgan Chase & Co. (NYSE: JPM), noticeably, is not on the list of Wall Street’s elite that are being looked at. The firm has been seen as one of the best-run financial institutions throughout the economic crisis, but did have a strong presence in the collateralized debt obligation market before the downturn.
Sources familiar with the situation have told the publication that Cuomo has issued subpoenas to these banks over, specifically, whether they provided false information to the ratings agencies in order to gain higher ratings on the toxic debt prior to the financial meltdown.
The banks include Goldman Sachs Group (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup (NYSE: C), Credit Suisse (NYSE: CS), Deutsche Bank AG (NYSE: DB), UBS AG (NYSE: UBS), Credit Agricole and Merrill Lynch. The ratings agencies that may have potentially been duped by the banks include Standard & Poor’s, Fitch Ratings and Moody’s Investors Service (NYSE: MCO).
Cuomo has not announced any official investigation and the banks declined the New York Times’ request for comment.
This new wave of investigations comes at a time when major Wall Street banks, including Goldman and Morgan Stanley, are facing investigations from the Securities and Exchange Commission and the Justice Department over allegedly misleading clients over the same toxic mortgage debt.
One the the biggest controversies to come out of the financial crisis was the high-ratings that the agencies had placed upon extremely risky securities.
JPMorgan Chase & Co. (NYSE: JPM), noticeably, is not on the list of Wall Street’s elite that are being looked at. The firm has been seen as one of the best-run financial institutions throughout the economic crisis, but did have a strong presence in the collateralized debt obligation market before the downturn.
You May Also Be Interested In
- FOMC minutes from July 28-29th meeting
- Scorpion Capital says short Twist Biosciences
- Nebius Group prices upsized $5B convertible notes offering
Create E-mail Alert Related Categories
Insiders' Blog, Trader TalkRelated Entities
Credit Suisse, Deutsche Bank, UBS, JPMorgan, Citi, Morgan Stanley, Fitch Ratings, Standard & Poor'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
