- Abu Dhabi Will Aid Debt-Fraught Dubai 'Case by Case'
- Banks With The Biggest Exposure to The UAE
- Dubai's Debt Woes Signal New Era for Creditors
- Next Week: Cash In Now Or Wait For A Santa Rally?
- Dubai Stock Selloff May Bring Buying Opportunity
- Longer Lines, Fuller Carts This Black Friday
- Big US Banks May Be Forced to Raise Capital: Bove
- Bank of America Amends Pay for Senior Executives
- Tiger Woods Out of Hospital After Accident
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Surprising Options Trades in TiVo Shares
- EA Sports Hopes to Pump Up Sales Through Pop-Up Locations
Text Size 
U.S. regulators are scrutinizing the books of Wall Street's largest investment banks amid questions they are hiding losses from subprime mortgages, people familiar with the inquiry said.
The Securities and Exchange Commission wants to see whether firms are calculating the value of subprime-mortgage assets on their books the same way they calculate those values for their brokerage clients, such as hedge funds.
Analysts and investors have raised questions whether there are unreported losses from subprime-mortgages and collateralized-debt obligations, or CDOs.
The regulatory checks are expected to include Wall Street's five biggest investment banks, starting with Goldman Sachs Group [GS
Loading...
()
] and Merrill Lynch [MER
Loading...
()
]. Goldman Sachs and Merrill Lynch declined to comment.
People familiar with the inquiry, first reported by the Wall Street Journal Friday, played down the checks as routine.
Wall Street banks are in a sensitive period as turmoil in U.S. mortgage markets generate losses for investors and push some lenders into bankruptcy. Yet few investment banks have disclosed significant subprime losses in recent periods.
The scrutiny may also help pinpoint whether hedge funds accurately report their results to investors, the Journal reported, citing an unnamed source. Regulatory checks into how firms calculate values of certain assets could boost the accuracy of performance reports to investors.
Marking subprime assets to market is tricky since they aren't easily traded, the Journal reported.
In late June, the SEC said it was probing about a dozen CDOs, which are securities that invest in mortgages and other debt.
In recent months mortgage losses have surfaced at some large investment firms. Swiss bank UBS was forced to shut down Dillon Read Capital Management less than two years after its launch following losses in mortgage markets.
Meanwhile Bear Stearns [BSC
Loading...
()
] shares, and its reputation, were slammed as two of its mortgage funds suffered losses and filed for bankruptcy.
Print
Email
- These four sectors will be the next to lead the market.
- Zhu Zhu Pets are this year's must-have toy, fetching $40 or more on eBay.
- From the why-didn’t-I-think-of-that file, we present Jason Sadler, a man whose job is wearing T-shirts.
- It may be the most unusual guide to business you'll read.
- Shopping for a gadget hound? The choices can be baffling. Here are a few that should be a hit.
- "The Who" will be the halftime act for Super Bowl XLIV on Feb. 7 in Miami. Is the NFL behind the times?
Data is a real-time snapshot *Data is delayed at least 15 minutes