NEW YORK, July 23 (Reuters) - The Financial Industry Regulatory Authority is investigating how Morgan Stanley , Barclays and Credit Suisse went about selling CDOs to institutional investors, a source familiar with the matter said.
A FINRA spokeswoman was unavailable to comment on the investigation into collateralized debt obligation securities (CDOs).
FINRA's probe comes as several government regulators examine the role that CDOs played in the financial crisis.
Reuters reported in June that the securities industry's self-regulatory agency was looking into potential improprieties in the structuring of the deals and the relationship between the CDO underwriters and mortgage lenders.
FINRA was examining whether Wall Street banks violated customary sales practices in pitching the CDOs to institutional investors.
Goldman Sachs Group Inc last week paid $550 million to settle civil fraud charges filed by the U.S. Securites and Exchange Commission over the firm's packaging and marketing of the Abacus CDO, a mortgage-linked security that turned toxic during the financial crisis.
FINRA is not known for handing out stiff penalties.
Earlier this week it fined Deutsche Bank $7.5 million for negligently misrepresenting some data in connection with the sale of subprime securities.
Spokesmen from Morgan Stanley and Barclays declined to comment. Credit Suisse did not immediately return a message seeking comment.
(Reporting by Steve Eder, editing by Leslie Gevirtz) Keywords: FINRA/ (Reuters email: steve.eder@reuters.com; +1 646 223 6069) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
A FINRA spokeswoman was unavailable to comment on the investigation into collateralized debt obligation securities (CDOs).
FINRA's probe comes as several government regulators examine the role that CDOs played in the financial crisis.
Reuters reported in June that the securities industry's self-regulatory agency was looking into potential improprieties in the structuring of the deals and the relationship between the CDO underwriters and mortgage lenders.
FINRA was examining whether Wall Street banks violated customary sales practices in pitching the CDOs to institutional investors.
Goldman Sachs Group Inc last week paid $550 million to settle civil fraud charges filed by the U.S. Securites and Exchange Commission over the firm's packaging and marketing of the Abacus CDO, a mortgage-linked security that turned toxic during the financial crisis.
FINRA is not known for handing out stiff penalties.
Earlier this week it fined Deutsche Bank $7.5 million for negligently misrepresenting some data in connection with the sale of subprime securities.
Spokesmen from Morgan Stanley and Barclays declined to comment. Credit Suisse did not immediately return a message seeking comment.
(Reporting by Steve Eder, editing by Leslie Gevirtz) Keywords: FINRA/ (Reuters email: steve.eder@reuters.com; +1 646 223 6069) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.