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Investments / The Ticker

Regulators probe post-crisis RMBS pricing

Discover potential issues from 2009-2011 time frame

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When it comes to residential mortgage-backed securities litigation, much of it relates to plaintiffs who experienced losses on mortgages sold off before the financial meltdown.

But the Wall Street Journal has uncovered a new potential leg of the crisis.

The paper says regulators are investigating several big banks to discover if traders may have exploited ‘murky pricing’ on RMBS from the time period stretching from 2009 to 2011.

The focus is on whether the goal was to buy or sell investments at artificially depressed or inflated prices, the paper said.

This is the WSJ story in a nutshell:

"In that postcrisis period, when the economy remained shaky and many markets weren't yet active again, banks still held on their books billions of dollars in hard-to-price assets. Regulators are seeking information about whether banks made significant misrepresentations about some of those assets to make deals.

The banks under scrutiny include Barclays, Citigroup, Deutsche Bank, Goldman Sachs Group, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland and UBS."

 

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