SEC Set to Warn Banks of Impending Suits over Bundled Subprime Mortgages
Posted Feb 9, 2012 8:00 AM CDT
By Debra Cassens Weiss
The U.S. Securities and Exchange Commission is reportedly planning to warn several banks of impending civil lawsuits over bundled subprime mortgages.
The targeted banks aren’t known, but several are being investigated, the Wall Street Journal (sub. req.) reports. They include Ally Financial, Bank of America, Citigroup, Deutsche Bank and Goldman Sachs.
“The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008,” the story says. “At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors.”