According to the WSJ, there’s a Federal investigation into Morgan Stanley (MS) that echoes the issues involving Goldman Sachs (GS).
Specifically, Federal investors are looking at CDO deals which were labelled after Presidents James Buchanan and Andrew Jackson, and which were nicknamed “Dead Presidents” by traders.
The probe is preliminary, according to the report, and at the level of the Manhattan DA’s office, so we’re talking criminal, not civil from the SEC.
At issue are the same kinds of issues regarding who packaged the CDOs, betting against them, and how the firm’s role was represented to clients.
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