Washington Post- The Securities and Exchange Commission is examining thenear-collapse of two Bear Stearns hedge funds that made bad bets on the mortgage market.
The SEC inquiry is informal and has not resulted in any subpoenas or formal document requests, a person familiar with the matter said yesterday. This person spoke on condition of anonymity because the inquiry has not been publicly disclosed.
The inquiry was disclosed Monday by BusinessWeek and CNBC. SEC Chairman Christopher Cox said at a House hearing Tuesday that the agency has started a dozen investigations related to complex aggregations of debt known as collateralized debt obligations, in which hedge funds have increasingly invested.
Cox would neither confirm nor deny the probe of Bear Stearns. The situation at Bear Stearns took on urgency last week with the near-collapse of two hedge funds that invested in mortgage securities.
