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Citi And Deutsche Subpoenaed Over CDO Sales

Tyler Durden's picture




 

Gasparino has broken news which everyone knew was pending, namely that Deutsche Bank's Greg "I am short your house" Lippmann, who abruptly left the firm a few days after the SEC complaing against Goldman was made public, is about to get the probe. In other words, the toxic CDO sale probe is escalating, and the latest lucky contestants are Citi and Deutsche Bank, which according to Fox Biz' Charlie Gasparino have been subpoenaed for further documentation after a preliminary investigation left far too many questions open.

Sources tell FOX Business that the Securities and Exchange Commission's most active investigations so far also include Deutsche Bank (DB: 65.2, 0.92, 1.43%) and Citigroup (C: 4.175, 0.005, 0.12%), two of the biggest packagers of the toxic debt, known as collateralized debt obligations, that are at the center of the government’s interest.

Sources tell FOX Business that after the SEC initially requested information from all the firms when it began its probe last year, it came back and subpoenaed Citigroup and Deutsche Bank for additional documents, underscoring a heightened level of interest. In the case of Citigroup, the SEC has conducted depositions of senior executives there, these people tell FOX Business.

As of today, there have been no so-called Wells Notices issued to either firm. A Wells Notice indicates that the commission’s enforcement staff is recommending to the full commission that the firms should be charged with civil securities fraud.

That said, people with knowledge of the matter say the probes are ongoing.

If today's rumor of an umpcoming criminal inquiry into Morgan Stanley is any indication, the tide of endless Wall Street favoritism is turning. Which should "explain" the ongoing melt up in stocks.

 

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Wed, 05/12/2010 - 15:22 | 347187 luckylogger
luckylogger's picture

Tyler,

look into SY

rumor of fact?

Wed, 05/12/2010 - 15:25 | 347198 Catullus
Catullus's picture

At this rate they'll supeona Michael lewis as well.

Wed, 05/12/2010 - 15:27 | 347209 The Alarmist
The Alarmist's picture

Yawn. Two more competitors to the Squid get notice.

 

Wed, 05/12/2010 - 15:53 | 347281 fuggetaboutit
fuggetaboutit's picture

there is really only one solution here

we need to provide all these banks some sort of mechanism by which they can make money 100% of the days they are open -- and not just one of them mind you, all of them

i am not even sure such a mechanism could really be created -- its a long shot, if anyone has any ideas please jot them below

lets consider all options here - lets think outside the box -- transferring wealth directly from the rest of the population to these banks, destroying the viablity of market based price discovery -- i realize these seem like crazy suggestions, but throw it all out there, we have to make sure these banks thrive at all costs

Wed, 05/12/2010 - 15:29 | 347216 Debtless
Debtless's picture

Will someone please start killing off these US Banksters.

Wed, 05/12/2010 - 15:30 | 347217 aint no fortuna...
aint no fortunate son's picture

Makes for great theater - all sound and fury and signifying shit.

Wed, 05/12/2010 - 15:32 | 347233 boeing747
boeing747's picture

All these 'probes'are deployed to crash Gold.

Wed, 05/12/2010 - 15:34 | 347237 Popo
Popo's picture

Once again, it's only a sign of "change" when we see sentences and jailtime.

I'm not optimistic.

Wed, 05/12/2010 - 16:03 | 347311 Slash
Slash's picture

exactly. until then, it's nothing but grandstanding to sucker what's left of the decimated middle class to support the criminals in office.

 

"ohhhhh we're going to get you mr banker bad guy!"   cue Yakety Sax.

Wed, 05/12/2010 - 15:37 | 347243 Comrade de Chaos
Comrade de Chaos's picture

Someone is about to get an anal probe, ha-ha.

Wed, 05/12/2010 - 15:52 | 347277 Eally Ucked
Eally Ucked's picture

Let see why it's anal probe:

CEO's of exchanges:

Mr. Niederauer, Mr. Griefeld, Mr.Ratterman, Mr.O'Brien, Mr.Katz, Mr.Brodsky

Now add names of chief regulators:

Mr.Genshler, Mrs. Shapiro and others

Then chiefs of US economy:

Mr.Summers, Mr.Geitner, Mr.Bernanke and then all those bosses of biggest banks:

you know them any way!

What is common here?

Isn't it too mono cultural to you? Shouldn't you diversify a bit?

Thanks for lot of junks, I love to be in the record books.

Wed, 05/12/2010 - 15:49 | 347266 mmlevine
mmlevine's picture

When I read The Big Short, Lippman was one asshole I could not stand.  "I'm short your house" - well fuck you man.  That's the house I live in with my family you prick.

Wed, 05/12/2010 - 15:50 | 347273 HarryWanger
HarryWanger's picture

These "probes" are only presenting buying opportunities. Look, we saw our "crash" last week and now the reaction is purely toward strong economic numbers. Today's action supports a new run above 1200 toward new highs. This was extremely bullish action today.

Wed, 05/12/2010 - 15:53 | 347279 Brak82
Brak82's picture

friday will be chaotic in europe.

Wed, 05/12/2010 - 15:58 | 347295 HarryWanger
HarryWanger's picture

Friday in US could push toward new closing SPX highs. We get claims tomorrow, which will obviously be better than expected just based upon the strong employment report last week. We get strong Retail Sales and Industrial Production as well. The "correction" will be wiped out in one week.

Thu, 05/13/2010 - 09:10 | 348793 moneymishap
moneymishap's picture

We get claims tomorrow, which will obviously be better than expected just based upon the strong employment report last week. We get strong Retail Sales and Industrial Production as well. The "correction" will be wiped out in one week.

Consensus:  440K

Reported: 444K

Wed, 05/12/2010 - 15:56 | 347290 reading
reading's picture

Oh, do we have to start this whole charade over?  For real?

Wed, 05/12/2010 - 16:11 | 347337 HarryWanger
HarryWanger's picture

No charade. We're basically where we were before everyone got suckered in by the "crash". It was a blip. Period. The chance to buy that low won't be seen again. Just look at the technicals. SPX is back to 50 dma and the solid level of 1175 is upon us once again. There's nothing fundamentally different than when we were at this level last week. Buying here after that pullback makes perfect sense. It's the base needed to catapult to the next level of highs.

Wed, 05/12/2010 - 17:02 | 347464 Flyingtrader
Flyingtrader's picture

Jesus Harry, puff, puff, pass...you've had enough.

Wed, 05/12/2010 - 18:42 | 347710 moneymishap
moneymishap's picture

This was extremely bullish action today.

 

http://www.youtube.com/watch?v=cMqaYyiyfrY&feature=related

Wed, 05/12/2010 - 17:51 | 347593 theprofromdover
theprofromdover's picture

Harry is one of these guys who -when the Tsunami turns and heads for the shore- says that's not fair, external events messed up my dream scenario.

Harry, it is all going pear-shaped. Trust me, pear-shaped big-time.

The worst of times. Get to high ground, you haven't got much time.

 

Wed, 05/12/2010 - 17:52 | 347595 theprofromdover
theprofromdover's picture

But you have every right to make your case as loud as you want -and believe it.

Thu, 05/13/2010 - 03:06 | 348521 IQ 145
IQ 145's picture

Good grief, Charley Brown; did you really think I was going to hold the football for you this time; you never learn.

Wed, 05/12/2010 - 16:06 | 347316 Crab Cake
Crab Cake's picture

Harry, I just want to know one thing.  Where do I send my resume, so that I can get paid to blog on ZH like you do?  I'll whore it out, just like you, I promise.  You've got some gig my friend, and I want in.  I'll spew whatever filth they want, you can count on me.  I work in TBTF customer service after all, so you know I can walk the corpo bs line.  What'dya say?  Do you get benes?

Wed, 05/12/2010 - 15:51 | 347275 Freewheelin Franklin
Freewheelin Franklin's picture

This is just the government blowing smoke up everybody's asses, like Bernanke and his "exit strtegy". I hope they pass that climate legislation soon. All of this smoke is causing a sharp increase in global warming.

Wed, 05/12/2010 - 15:54 | 347278 BGO
BGO's picture

Seems like the SEC is starting to spread themselves a little thin. Why don't they focus on one or maybe two investigations at a time? Get a conviction or two under their belts then move on to the next case. Does the SEC even have the resources needed to conduct so many simultaneous investigations? Seems like they may be trying to address and forget a bunch of issues in short order.

Wed, 05/12/2010 - 17:39 | 347565 TheGoodDoctor
TheGoodDoctor's picture

Job creation? :p

Wed, 05/12/2010 - 15:58 | 347280 Crab Cake
Crab Cake's picture

....the tide of endless Wall Street favoritism is turning.

I'll believe it when I see the brand of justice applied.  As far as I'm concerned what we are looking at is a backward sort of vetting.  Look, see, we slapped Wall St on the wrist, "justice" has been done.  They've learned their lesson, and paid their dues.  Carry on sheeple, let's "fix" the system, don't look backward let's look forward...blah blah blah.

I'm sorry, but these banks, corporations, and the Fed have to die.  Furthermore, the criminals in DC and on Wall St must be put behind bars or executed; for the good of our nation, our children, and humanity in general.

IT IS TIME FOR REVOLUTION.  STOP PARTICIPATING.

Stop doing business with banks.  Stop investing and trading.  Stop using debit cards and electronic money.  Stop paying the credit cards.  Stop paying the mortgage.  Stop paying taxes by not working, or any other method.  Stop buying.  Stop voting for Democrats or Republicans, or at the very least incumbents. 

These criminals only use the power that we give them.  Their is no power to take back, it is already ours, we just give it to them.  Stop participating, and voice your demands to the heavens.  The banksters are not the only ones that can arrest the system and hold it hostage.  If even a decent sized minority (teaparty) work striked for a month, a week even, this country would come to its knees.  TPTB woul beg to fulfill the demands of the electorate.

Term limits.  Free, open, and fair elections for all qualifying parties funded only by public monies.  An end to the War on Drugs.  I could go on, but until you people are ready to stop participating, and say no more business as usual... It really doesn't matter what we demand because no one will listen.

Wed, 05/12/2010 - 16:37 | 347392 hbjork1
hbjork1's picture

Crab Cake:

I think you got some bad Crab.

You should sit down and do what the scientists call a "thought experiment" to visulize what would gradually follow if everybody stopped paying credit cards, stoped paying the mortgage (money that you have borrowed from someone else), stopped buying (Do you have your own farm with tractor to do the plowing?) Stop participating? And where do the public monies come from if people stopped paying taxes?

You can have it, I don't want it, its to sad for me.  

Well, maybe when I am dead.

Wed, 05/12/2010 - 17:07 | 347460 Crab Cake
Crab Cake's picture

Oh, I've seen it, and I've thought it through.  It's either this way, a peaceful way, or it will be much much worse.  I am not afraid.  Kill me, jail me, shoot me, fuck me, lie to me, whatever, but my children will not be slaves in this fucked up company store of a fascist police state so long as I live.  My family throughout the generations has stood for the Republic. I'm not going to run, I will not be silenced, I will not be bought, I will not stop until we have some semblance of good representative government, and GOD help those that stand against me and those of a like mind. This is our time. Stand up for yourself for gods sake, and if not for yourself then your children, and if not for them your parents, and if not for them then your neigbors and friends.  This ours, not theirs.  STAND UP!

I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear.
I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing.
Only I will remain.

 

-BeneGesserit Litany Against Fear, Dune, Frank Herbert

Wed, 05/12/2010 - 15:54 | 347284 carbonmutant
carbonmutant's picture

Why would the White House be putting pressure on the Germans...?

Aren't they buying enough treasuries?

Wed, 05/12/2010 - 16:38 | 347398 anony
Wed, 05/12/2010 - 16:47 | 347425 I am a Man I am...
I am a Man I am Forty's picture

US banks go broke, market goes down.

Give US banks money, market goes up.

European banks go broke, market goes down.

Give European banks money, market goes up.

 

Wed, 05/12/2010 - 21:36 | 348139 Matto
Matto's picture

Not necessarily the case, correct me if im wrong but didnt the market keep crashing after TARP? it was the changing of the accounting standards that made the difference.

Wed, 05/12/2010 - 18:27 | 347677 mynhair
mynhair's picture

i SAID IT BEFORE, AND i'M SAYING IT AGAIN.

OBummer will destroy the financial system, and replace it with his buddies at GETCO.

Thu, 05/13/2010 - 04:20 | 348559 Grand Supercycle
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