SEC Just Now Seeking Key Information On Meltdown

In an ongoing investigation by ProPublica, a non-profit investigative newsroom, in collaboration with NPR's Planet Money, reporters found that almost three years since banks starting taking losses that led to the worst financial crisis since the Great Depression, the Securities and Exchange Commission is still asking basic questions about what happened.

Accoring to the report, the SEC is conducting an information-gathering sweep of the key players in the market for collateralized debt obligations, the bundles of mortgage securities whose sudden collapse in price was at the center of the meltdown of the global banking system.

Propublica's Jake Bernstein and Jesse Eisinger will discuss the story on today's All Things Considered. (Audio available at approx. 7 pm.)

In a letter dated Oct. 22, the SEC sent what amounts to a questionnaire to a number of collateral managers, the middlemen between the investment banks that created the complex financial products and the investors who bought them.

"One wonders why this letter, especially given the general nature of it, is just now being sent and why wasn't it sent several years ago as the CDO market was exploding," says Lynn Turner, who was the SEC's chief accountant in the late 1990s. "It makes it look like the SEC is several years behind the markets."

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