Credit Suisse First Boston is investigating a loss of at least $40 million in its mortgage-backed securities book, according to officials at rival firms. A CSFB official says firm management is currently in discussions with at least one mortgage-backed trader, Mike Flannelly, a whole loan trader, concerning the losses. CSFB is conducting a forensic check on recent MBS activities. Flannelly did not return calls. The CSFB official says Flannelly remains an employee of the firm but has been moved off the MBS trading desk.
Andy Kimura, co-head of the structured products group, declined to comment on an employee matter. John Gallagher, a spokesman, also declined to comment.
