FBN’s Charlie Gasparino reports that Securities regulators have launched a global investigation into the extent Wall Street and the big banks used “Repo 105s”. These transaction, which allowed big firms to borrow money to finance esoteric investments that turned toxic in 2007 and 2008, were used by Lehman Brothers as a way to mask the true nature of the co.’s massive leverage.
According to Gasparino, the investigation involves inquiries by the Fed, the primary U.S. regulator of financial firms, and the UK’s Financial Services Association.
