Industry News

Probe opens on Wall Street ratings of subprime lenders

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Saying their research of subprime lenders such as New Century Financial Corp. was "very rosy," Massachusetts Secretary of State William Galvin has issued subpoenas to Wall Street investment banks UBS Securities LLC and Bear Stearns & Co., the Associated Press reported Tuesday. Galvin said he's investigating research reports Wall Street investment firms issued on New Century and other subprime lenders. At this point in the investigation, it's too early to say if other investment firms will be subpoenaed, he said. The subpoenas seek records on fees and commissions earned by the firms relating to subprime lenders, and communications between hedge fund clients invested in subprime lenders, AP reported. UBS and Bear Stearns have until March 27 to turn over all documents generated by subprime lending analysts at the two firms.   A UBS spokeswoman told AP the company is proud of its research track record in general, and a Bear Stearns spokeswoman defended the work...