National City Corp. (NCC) has disclosed that it's the subject of an informal Securities and Exchange Commission investigation.
In its quarterly 10-Q filing with regulators, National City said it was informed on June 30 by the Chicago office of the SEC about the probe. Regulators have requested documents about National City's "loan underwriting experience, dividends, bank regulatory matters and the sale of First Franklin Financial Corporation," said the filing, which was released Friday.
Cleveland-based National City sold First Franklin, a subprime lender, to
National City said in the filing that it would cooperate with the SEC, adding that "at this time, the scope or outcome of the matter cannot be determined."
Like many other banks, National City is suffering from the housing slowdown and bad loans. It lost $1.76 billion, or $2.45 a share, in the second quarter. Its shares closed Friday at $5.12, well off their 52-week high of $31.58.
This article was written by a staff member of TheStreet.com.