UPDATE: Bank Stocks Show Little Reaction To Added Probes

[ProSense]

Source: Wall Street Journal

NEW YORK (Dow Jones)--The financial sector largely shrugged off reports of new federal investigations into banks' roles in mortgage-bond deals, with shares slightly lower as additional investigations largely were expected.

Federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals, a person familiar with the matter told The Wall Street Journal. Many major Wall Street banks created collateralized debt obligations at the behest of players that made bets against the deals--and banks themselves sometimes bet against the deals. Bearish bets paid off when the mortgage market crashed.

The banks under early-stage criminal scrutiny--J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C), Deutsche Bank AG (DB) and UBS AG (UBS)--also have received civil subpoenas from the U.S. Securities and Exchange Commission as part of a sweeping investigation of banks' selling and trading of mortgage-related deals, the person said. Under similar preliminary criminal scrutiny are Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS).

Meanwhile, the New York attorney general is starting an investigation into eight banks to determine if they provided misleading information to rating agencies to inflate the grades of certain mortgage securities, The New York Times reported, citing two people with knowledge of the investigation. The targets include Goldman Sachs, Morgan Stanley, UBS, Citigroup, Deutsche Bank, Credit Suisse Group (CS), Credit Agricole SA (CRARY) and Merrill Lynch, which is now owned by Bank of America Corp. (BAC), the report said.


Read more: http://online.wsj.com/article/BT-CO-20100513-710549.html?mod=WSJ_World_MIDDLEHeadlinesEurope

[marmar]

1. Of course not.....Investors know the only thing coming is a strongly-worded letter....

....some "stern" words on TV, and a miniscule fine. They'll get away with it, as they always do.

[Amonester]

2. And voters know they'll throw out the Dems in november...

if they continue to govern like GOP-lites and still don't deliver their 2006 promise to END the costly wars.

[jschurchin]

3. Probes, schmobes.

The financial sector has the congress and senate by the short hairs. All they will do is say "No more campaign funding for you". And the assholes will run, scream, and tell the American people, "we tried but couldn't get a consensus, so maybe next year" in the meantime JPM, C, WFC and the rest of the fascist's fuck's will continue to shove it up our ass and ask if we like it.