Thursday, 28 July 2016
Last updated 5 hours ago
Jun 18 2014 | 3:03pm ET
Hedge fund Carrington Holding’s move into mortgage-servicing is getting some unwanted attention seven years after the deal.
The Securities and Exchange Commission is investigating Carrington’s 2007 purchase of New Century Financial’s mortgage-servicing business following the subprime lender’s collapse. The regulator began subpoenaing documents from Carrington in the fall, The New York Times reports.
In particular, the SEC wants to know about how Greenwich, Conn-based Carrington financed the $188 million deal, as well as about the servicing business itself. Carrington used preferred equity securities to refinance part of the purchase, last year replacing them with $530 million in unsecured Irish Stock Exchange-listed securities that come due in 2021.
Carrington disclosed the probe to investors in November, but it has not previously been publicly reported.