SEC, Banks Talk CDO Settlement: Report

The SEC is in preliminary talks with several major banks to resolve an investigation of their sales of CDOs that played a large role in the financial crisis, the <I>Wall Street Journal </I> reports.
By Joseph Woelfel ,

NEW YORK (

TheStreet

) -- The

Securities and Exchange Commission

is in preliminary talks with several major banks to resolve an investigation of their sales of mortgage-bond deals that played a large role in the financial crisis, the

Wall Street Journal

reports, citing people familiar with the matter.

The probe involves collateralized debt obligations, or CDOs, that were sold to different investors, the

Journal

reports.

The SEC, after issuing subpoenas for documents and interviewing officials from nearly every bank that was a major player in the sales of the CDOs, has begun negotiating with the companies, these people said, the newspaper reports.

The talks are at early, informal stage and could fall apart, people with knowledge of the talks said.

Firms that received SEC subpoenas include

Citigroup

(C) - Get Report

,

Deutsche Bank

(DB) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

,

Morgan Stanley

(MS) - Get Report

and

UBS

(UBS) - Get Report

. None of the banks has been charged as a result of the investigation.

A spokesman for the SEC wouldn't comment for the newspaper, nor would any of the banks.

-- Written by Joseph Woelfel

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Joseph Woelfel

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