March 24 (Reuters) - The U.S. Securities and ExchangeCommission has launched an investigation into the increasingnumber of complex bond deals on Wall Street that may create newopportunities for fraud, the Wall Street Journal reported onMonday.
Investigators with the SEC are examining if banks andcompanies are using the bond deals to hide risks illegally, thenewspaper reported, citing sources close to the matter.
The securities are packages of corporate loans and debtsthat are assembled and sold by Wall Street Banks to investors.They have gained in popularity after the financial crisis asinvestors chase riskier investment products. (WSJ story: http://link.reuters.com/vuj87v)
The SEC is also investigating whether a number of banksincluding Barclays, Citigroup, Deutsche Bank AG, Goldman Sachs Group, Morgan Stanley,Royal Bank of Scotland and UBS AG have beencheating their clients by mispricing certain bond deals.
The SEC was not immediately available for comment outside ofnormal business hours. (Reporting by Narottam Medhora in Bangalore; Editing by LisaShumaker)
Barclays (BARC)
