SEC's Road To Victory Unclear In Potential CDO Cases

Law360, New York (April 4, 2011, 7:50 PM EDT) -- The U.S. Securities and Exchange Commission has reportedly begun preparing a civil case against Wachovia Corp. alleging the bank pumped up the prices for collateralized debt obligations, but observers say actually filing and winning such a case will be difficult given that most of Wall Street made the same CDO mistakes.

“The SEC would have to prove that the bank knew they were selling garbage,” said Ronald Colombo, a professor at Hofstra University School of Law. “It's always hard to prove that someone knew. It's even...
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