Thursday, 25 December 2014
Last updated 1 day ago
Jan 30 2012 | 2:05pm ET
Deutsche Bank is in hot water over allegedly allowing Paulson & Co. a hand in picking the mortgage-backed securities that went into a collateralized debt obligation.
The Securities and Exchange Commission is investigating the START CDO, the German magazine Der Speigel reports. The allegations are similar to those that Goldman Sachs paid $550 million to settle a year-and-a-half ago: that the bank allowed the hedge fund to pick the securities that went into the CDO and then failed to tell other investors that Paulson was shorting the CDO.
Deutsche Bank said it will investigate the possible SEC allegations and, if it disagrees with the regulator, will defend any enforcement action.
The SEC last year moved to put an end to the practice of hedge funds participating in CDO structuring, voting to approve new conflict of interest rules for asset-backed securities. The rule forbids banks from allowing third parties that had a hand in selecting the securities for an ABS to short the ABS.
The SEC investigated a number of CDO transactions on the Goldman-Paulson grounds, including several linked to Magnetar Capital. No hedge fund has been accused of any wrongdoing in the process.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.