Sunday, 1 May 2016
Last updated 1 day ago
Aug 31 2011 | 1:48pm ET
Edward Steffelin, the only person charged with wrongdoing over his alleged role misleading investors about a collateralized debt obligation allegedly structured and marketed on behalf of Magnetar Capital, has asked a court to dismiss the Securities and Exchange Commission's lawsuit against him.
Steffelin, who worked at GSC Group, which selected the securities that went into the $1.1 billion Squared CDO in 2007, said in a court filing yesterday that "nothing was omitted" and "no one was defrauded" on the deal. The SEC alleges that Steffelin and JPMorgan Chase, which settled with the SEC in June for $153 million, failed to disclose Magnetar's role in selecting the securities that went into Squared, and that Magnetar had been betting against the very subprime mortgages that comprised the CDO.
Magnetar has denied any wrongdoing, and has not been accused of such.
Steffelin's lawyer wrote that the SEC has sought to hide its lack of evidence behind a "parade of horribles."
"There is no question that the credit crisis and the collapse of the housing market deserve intense regulatory focus," Alex Lipman wrote. "This is not the right case and certainly the wrong defendant for the SEC to target."