As part of its investigation into collateralized-debt obligations, the SEC is "focusing" on deals "involving hedge fund Magnetar Capital," the WSJ reports. Magnetar's involvement in the CDO market was the subject of a collaboration between Planet Money, ProPublica and This American Life earlier this year.
According to the Journal:
Among other things, investigators want to know how the assets that were put into the CDOs were valued at the time, what the terms of the deal were, what triggers were put in place to determine whether investors would incur losses and at what point did firms involved in the deal bet against the assets in the CDO, people familiar with the matter say.
A spokesman for Magnetar told the Journal: "As we understand it, the entire CDO market has for some time been under review by various regulators." ProPublica notes that this response is nearly identical to the one they were given by Magnetar earlier this year, when the hedge fund said: “We are not aware that this inquiry is focused on any particular person or firm.”