Securities Law Blog

According to a recent Wall Street Journal report, federal prosecutors are stepping up their investigations into the subprime woes that are gripping the US economy. The Manhattan US Attorney’s office, according to the article, has notified the SEC that is wants to see information that the Staff has gathered in connection with its investigation of Merrill Lynch & Co. The SEC is examining, among others things, whether the firm booked the securities at inflated prices despite knowledge that the valuations had dropped. The move by federal prosecutors comes as the SEC has elevated its probe to the “formal investigation” stage-which gives the C ommission broad subpoena powers in aid of its investigation. Cooperation between the SEC and prosecutors and the self regulatory investigations (such as FINRA) is expressly provided for in documents such as the Form 1662, given to all witnesses subpoenaed by the Commission.

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.