Wall Street Faces SEC Audit Over Subprime Reports

Law360, New York (August 10, 2007, 12:00 AM EDT) -- Federal regulators are reportedly investigating whether Wall Street's top firms are covering up losses associated with the collapse of the subprime mortgage industry.

The U.S. Securities and Exchange Commission is examining whether Wall Street firms such as Goldman Sachs Group Inc. and Merrill Lynch & Co. are calculating the value of subprime mortgage assets in their inventory in the same way as assets held for customers such as hedge funds, The Wall Street Journal reported Friday, citing people familiar with the inquiry.

Few big Wall Street...
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