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SEC probes banks and companies in loan securities dealings: WSJ

The U.S. Securities and Exchange Commission has launched an investigation into the increasing number of complex bond deals on Wall Street that may create new opportunities for fraud, The Wall Street Journal reported on Monday.

Investigators with the SEC are examining if banks and companies are using the bond deals to hide risks illegally, the newspaper reported, citing sources close to the matter.

Adam Jeffery | CNBC

The securities are packages of corporate loans and debts that are assembled and sold by Wall Street Banks to investors. They have gained in popularity after the financial crisis as investors chase riskier investment products.

(Read more: Morgan Stanley investors await Fed's blessing)

The SEC is also investigating whether a number of banks including Barclays, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland, and UBS have been cheating their clients by mispricing certain bond deals.

The SEC was not immediately available for comment outside of normal business hours.

By Reuters

Banks