Regulators from the Securities and Exchange Commission are checking to make sure that Wall Street brokerage firms and banks aren’t hiding subprime losses, reports The Wall Street Journal. The SEC is looking into whether Wall Street brokers are using consistent methods to calculate the value of subprime mortgages in their inventory. Checks are expected take place at the top five Wall Street firms and at the securities units of the major commercial banks. David Trone, an analyst at Fox-Pitt, Kelton, said some firms “don’t come clean” about losses during earnings season. “You don’t know when people take losses, it’s buried,” said Trone.
SEC Checking Street Books