March 24 (Reuters) – The U.S. Securities and Exchange Commission has launched an investigation into the increasing number of complex bond deals on Wall Street that may create new opportunities for fraud, the Wall Street Journal reported on Monday.
Investigators with the SEC are examining if banks and companies are using the bond deals to hide risks illegally, the newspaper reported, citing sources close to the matter.
The securities are packages of corporate loans and debts that are assembled and sold by Wall Street Banks to investors. They have gained in popularity after the financial crisis as investors chase riskier investment products. (WSJ story: http://link.reuters.com/vuj87v)