Major Wall Street firms under investigation

 

NEW YORK — The New York attorney
general has launched a probe into eight large banks to determine whether they
provided misleading information to credit ratings agencies, according to people
with knowledge of the investigation.

New York Attorney General Andrew
Cuomo is focusing on the relationships between the banks and the credit rating
agencies that rated certain mortgage-related securities packaged by the banks
and sold to clients, said the people, who spoke on the condition of anonymity
because the investigation is ongoing.

Cuomo is looking at whether the
U.S. and European-based banks gave false information to the agencies about the
assets in the securities to get better ratings.

Cuomo’s office issued subpoenas to
Citigroup, Goldman Sachs, Morgan Stanley, Merrill Lynch (now owned by Bank of
America), Credit Suisse, Deutsche Bank,
Credit Agricole and UBS. The three major rating agencies — Standard &
Poor’s, Moody’s Investors Service and Fitch Ratings — have also been
subpoenaed, according to two people with knowledge of the matter.

The probe, in its early stages, comes
as large banks face increasing scrutiny from regulators and federal law
enforcement authorities for various activities during the years leading up the
financial meltdown.

“We . . . will cooperate with
the authorities to substantiate our position,” said Ted Meyer, a spokesman
for Deutsche Bank.

Representatives for Bank of
America, Citigroup, UBS, Credit Suisse and Moody’s said their firms were
cooperating with the investigation.

Goldman and Morgan Stanley declined
to comment. Standard & Poor’s and Credit Agricole did not return messages
Thursday morning.

0
0

NO COMMENTS