The SEC wants to know what other big financial firms may have used Repo 105, the accounting gimmick that Lehman Brothers recently made famous.
Investment banks and other financial firms use the repo market to borrow money. But Repo 105 allowed Lehman to pretend like it would never have to pay back some of the money it borrowed on the repo market, according to a report that came out a couple weeks ago.
(Here's a post that explains Repo 105 and the repo market in general.)
Now, the SEC is sending letters to "two dozen large financial institutions and insurance companies" to ask about their use of the repo market. The companies haven't been named.
There are lots of questions aimed at figuring out how companies are accounting for their use of the repo market, and whether it's clear to investors that the funds the companies get from the repo market are borrowed money. Here's a copy of the letter.