SEC's Cox: Subprime Probes Underway
Testifying at the Senate Banking committee hearing, SEC Chairman Chris Cox said his agency has more than 50 investigations open on subprime mortgage cases, trying to ascertain if anything illegal went on in the risky-mortgage market that contributed to the current crisis.
In his testimony, Cox called for the regulation of the credit-default swap market, which has taken much of the blame for the state of things.
A credit-default swap, or CDS, is an unusual financial instrument in which the risk of default on credit is passed around like a hot potato.
"This market is regulated by absolutely no one," Cox said. "It is a market ripe for fraud and manipulation."
Cox said he is using the SEC's anti-fraud authority to investigate the CDS market.
-- Frank Ahrens
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