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Federal Criminal Probe of Wall Street Banks Expands

HeadlineMay 13, 2010

The Wall Street Journal reports 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. The banks facing scrutiny include JPMorgan Chase, Citigroup, Deutsche Bank and UBS. The banks have also received civil subpoenas from the Securities and Exchange Commission as part of a sweeping investigation of banks’ selling and trading of mortgage-related deals known as collateralized debt obligations. Goldman Sachs and Morgan Stanley are already facing criminal probes.

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