Securities and Exchange Commission officials are pushing hard as part of their probe of collateralized debt obligations and other mortgage-related products developed by Wall Street to bring charges against individuals, such as executives involved in selling the deals or outsiders who managed the assets, according to an article by Jean Eaglesham in today's edition of The Wall Street Journal.
The article said that the "settlement agreements being hammered out by U.S. securities regulators and securities firms accused of fraud in mortgage-bond deals are likely to include civil charges against at least one person connected to each deal, people familiar with the situation said."
The article added that "while the situation remains fluid, the agency also could file civil charges against hedge-fund managers who helped structure certain mortgage-bond deals but then bet against them."
In a separate article in the same edition of The Journal, Deborah Solomon and Victoria McGrane wrote that "financial regulators, bowing to congressional pressure, promised to provide more clarity about how they ill determine which large financial firms should face stricter capital standards and regulation. Deputy Treasury Secretary Neal Wolin told a Senate Banking commission hearing yesterday that regulators will provide additional guidance on the approach to designating which firms could have a systemic impact on the financial system if they run into trouble."
Mr. Wolin also said regulators would give the public more time to comment on the criteria, which could delay the government's decision, the article continued, adding that "Regulators still are debating which financial firms, specifically those that aren't banks, will get the label 'systematically important.' Several officials have said they believe only a small number initially will be designated as 'too big to fail.'"
The Dodd-Frank financial overhaul law automatically designates bans with $50 billion or more in assets as systematically important, but gives regulators authority to decide which non-bank financial firms pose risks. The article said that "some regulators want a larger number of nonbank firms, such as hedge funds, mutual funds and insurance companies to provide data to regulators even if they escape the systemic designation."
The article said that the "settlement agreements being hammered out by U.S. securities regulators and securities firms accused of fraud in mortgage-bond deals are likely to include civil charges against at least one person connected to each deal, people familiar with the situation said."
The article added that "while the situation remains fluid, the agency also could file civil charges against hedge-fund managers who helped structure certain mortgage-bond deals but then bet against them."
In a separate article in the same edition of The Journal, Deborah Solomon and Victoria McGrane wrote that "financial regulators, bowing to congressional pressure, promised to provide more clarity about how they ill determine which large financial firms should face stricter capital standards and regulation. Deputy Treasury Secretary Neal Wolin told a Senate Banking commission hearing yesterday that regulators will provide additional guidance on the approach to designating which firms could have a systemic impact on the financial system if they run into trouble."
Mr. Wolin also said regulators would give the public more time to comment on the criteria, which could delay the government's decision, the article continued, adding that "Regulators still are debating which financial firms, specifically those that aren't banks, will get the label 'systematically important.' Several officials have said they believe only a small number initially will be designated as 'too big to fail.'"
The Dodd-Frank financial overhaul law automatically designates bans with $50 billion or more in assets as systematically important, but gives regulators authority to decide which non-bank financial firms pose risks. The article said that "some regulators want a larger number of nonbank firms, such as hedge funds, mutual funds and insurance companies to provide data to regulators even if they escape the systemic designation."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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