Charlie Gasparino reports that the government has ramped up its investigation of Wall Street’s sale of toxic securities during the financial crisis. At the center of the government’s interest, according to Gasparino’s sources, are Deutsche Bank (DB) and Citigroup (C), two of the biggest packagers of the toxic debt, known as collateralized debt obligations [CDO].
FBN: “Sources tell FOX Business that after the Securities and Exchange Commission initially requested information from all the firms when it began its probe last year, it came back and subpoenaed Citigroup and Deutsche Bank for additional documents, underscoring a heightened level of interest. In the case of Citigroup, the SEC has conducted depositions of senior executives there, [sources] tell FOX Business.
As of today, there have been no so-called Wells Notices issued to either firm….That said, people with knowledge of the matter say the probes are ongoing.”
Gasparino also notes that the SEC’s increased interest of the sales of CDOs signals that the Justice Department’s probe of Goldman Sachs (GS) and Morgan Stanley (MS) is actually much wider.