A past deal between Carrington Holding Company and failed subprime lender New Century Financial is under investigation by the Securities and Exchange Commission. The investigation is looking into information about how Carrington financed the $188 million deal, which relied in part on the firm’s later issuing special securities to the investors in its hedge fund. Per DealBook:    

A person briefed on the matter who spoke on the condition of anonymity said the S.E.C. investigation was being led by the agency’s Boston regional office. Carrington’s principal offices are in Greenwich, Conn., and Santa Ana, Calif.

It is not clear why the S.E.C., which issued its first subpoena in the matter in September, is looking into Carrington’s purchase of the New Century mortgage servicing platform now, given that New Century collapsed in bankruptcy in April 2007. In an investor letter in November, Carrington said that the S.E.C.’s subpoena requested documents relating to the New Century acquisition and the valuation of securities that Carrington issued to investors to help pay for the purchase.