Federal regulators are investigating whether major Wall Street banks exploited the murky post-crisis financial environment to cheat clients and boost their profits, according to the Wall Street Journal. The investigation centers on whether banks deliberately mis-priced the same mortgage bonds that were central to the 2008 meltdown.
Even after the 2008 financial crisis that crashed the U.S. economy, big Wall Street banks held on to billions of dollars in mortgage-backed securities that helped cause the crash.
Regulators are investigating whether traders took advantage of the difficult-to-price assets and sold those mortgage-backed securities at depressed or inflated values between 2009 and 2011, the Wall Street Journal reports.
The investigation is said to include banks such as Barclays PLC, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase, Morgan Stanley, among others.
The banks have not yet publicly commented on the investigation, which is said to still be in its early stages.