FINRA (The Financial Industry Regulatory Authority) decided to look into whether risky subprime mortgage securities were sold inappropriately to individuals who aren't suitable targets for these risky collateralized mortgage obligations (CMOs), Bloomberg reports this morning.

On its website, FINRA warns that CMOs should be sold to "sophisticated investors" who will be "prepared to do a lot of homework." FINRA sent letters on Dec. 14 to find out if this warning was heeded in sales of CMOs to the general public.

In the letter, FINRA asks more than a dozen firms to supply "sales spreadsheets, marketing materials and procedures and methods for matching products to clients' investment needs by Jan. 8, according to Bloomberg. in addition, these letters ask for training materials and a list of customer complaints related to these investors. One lawyer, Brian Rubin, whose clients received the letters, told Bloomberg that "FINRA believes these are potentially risky and complicated products, and they have concerns about suitability." He would not name his clients, and right now the letters were sent to a cross section of the industry without any suspicion of wrongdoing.

The big question is whether these risky products were sold to retirees or others who do not meet the standards of "sophisticated investors" who would be suitable targets for these types of investment products. In September, FINRA CEO Mary Schapiro first indicated that she planned to scrutinize sales of mortgage-backed products to retirees.