SEC Launches Merrill Lynch Probe: Report

Law360, New York (November 2, 2007, 12:00 AM EDT) -- In the wake of Merrill Lynch Inc.'s disclosure that it will write down $8 billion due to subprime mortgage exposure, the U.S. Securities and Exchange Commission has reportedly decided to take a closer look at the way the investment bank values its mortgage-backed securities.

The regulator will investigate reports that Merrill made several deals with hedge funds designed to hide its mounting debt due to losses from mortgage-backed securities, the Wall Street Journal reported on Friday.

The SEC probe will attempt to determine whether Merrill's debt...
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