Merrill Lynch & Co. (NYSE: MER), Deutsche Bank AG (NYSE: DB), and Bear Stearns Cos. (NYSE: BSC) have been subpoenaed by New York Attorney General Andrew Cuomo as part of an investigation of "related to the packaging and selling of debt tied to high-risk mortgages," according to the Wall Street Journal (subscription required).Among the information Cuomo is seeking is about the super cozy relationship between the banks and the credit-rating agencies, the paper said.
This is big.
Cuomo, the son of former Gov, Mario Cuomo, is a politically ambitious guy. His predecessor Eliot Spitzer made his mark exposing the sleazy practices of Wall Street analysts and brought down former New York Stock Exchange honcho Richard Grasso.
Sure this is a fishing expedition, but Cuomo is a captain of a mighty big ship. The banks better strike a deal with him fast or else they are going be in for a tough slog.
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