A tough job for the SEC

Author: | Published: 1 Dec 2007

In recent months, the financial markets have experienced fallout from the meltdown in the subprime mortgage market. And enforcement actions by the Securities and Exchange Commission (SEC) may lie ahead. The SEC's enforcement division has created a subprime working-group, staffed with more than 24 attorneys in offices nationwide.

In a series of public statements, SEC officials have emphasised the breadth of their investigations, which, they say, cover a wide range of players in the subprime mortgage industry. Almost daily, another company or hedge fund discloses that it is being investigated by the SEC, or it discloses write-offs or other accounting adjustments that are certain to invite SEC scrutiny. The head of the SEC's subprime working group stated that the agency "has focused significant resources" on subprime investigations. She also "encourage[d] market participants who believe they have securities-related issues in this area to contact us as soon as possible". Regulators in...