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REUTERS Sat, 12 Jan 2008
New York prosecutors are investigating whether Wall Street banks withheld information about the risks stemming from subprime loan-linked investments, The New York Times reported on Saturday.

Citing people with knowledge of the matter, the newspaper said the inquiry, begun last summer by state Attorney General Andrew Cuomo, was focusing on how banks bundled billions of dollars of exception loans and other subprime debt into complex mortgage investments.

Charges could be filed as soon as the coming weeks, the Times said. Connecticut Attorney General Richard Blumenthal told the newspaper he was also conducting a review and cooperating with New York officials.

New York state law would allow for criminal as well as civil charges, the Times said.

Cuomo declined to comment, but the Times said he had subpoenaed Wall Street banks including Lehman Brothers (LEH.N: Quote, Profile, Research) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research), as well as major credit-rating companies Moody's Investors Service, Standard & Poor's and Fitch Ratings. Mortgage consultants including Clayton Holdings (CLAY.O: Quote, Profile, Research) in Connecticut and the Bohan Group, based in San Francisco, were also subpoenaed.

Officials at Wall Street banks and the American Securitization Forum declined to comment, the Times said, while credit-rating firms would not say they had been subpoenaed, but that they were generally not provided due diligence reports even when they asked for them.

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 Tuesday, 15 May 2012 07:37:05 UTC/GMT

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