The Real Deal New York

Cuomo investigating eight banks over mortgage securities

May 13, 2010 12:03PM

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If misery loves company, embattled investment bank Goldman Sachs should be feeling better with each passing day. Yesterday, it was revealed that U.S. prosecutors are investigating Morgan Stanley over whether the bank misled investors in mortgage-derivatives deals it was simultaneously betting against. Today, sources told the New York Times that New York Attorney General Andrew Cuomo has launched a probe into whether eight banks duped rating agencies into inflating the grades of mortgage securities in the years before the housing market’s collapse. UBS, Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole and Merrill Lynch are targets of the probe, in addition to Goldman Sachs and Morgan Stanley. Standard & Poor’s, Fitch Ratings and Moody’s Investors Service are the agencies said to have been misled. [NYT]

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