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.