ih.advfn.com/...cb=1222452529&article=28345183&symbol=NO^LEHMQ
New York probing credit-default swap market-source
NEW YORK NEW YORK, Sept 26 (Reuters) - New York Attorney General Andrew
Cuomo, who last week began investigating short-selling abuses in the stock
market, is now taking a hard look at whether credit-default swaps are being used
to push down share prices, a person familiar with the probe told Reuters Friday.
Cuomo has issued subpoenas to three market-data providers that produce
reports on the price of CDS, which bond investors purchase to protect themselves
against defaults. The providers are Markit Group Ltd, Depository Trust &
Clearing Corp and Bloomberg LP.
The state believes swaps may have been used by short-sellers to spread
negative rumors about companies and then gain from the declines in their stock
prices.
Cuomo's office believes the three data providers can help identify
parties engaging in swap transactions and pinpoint when positions were taken.
"These credit default swaps are being manipulated in a way to make the
markets think a company is less healthy than it really is," the person familiar
said. "That's another potential form of spreading false rumors."
The CDS market is largely unregulated and opaque, comprised of privately
negotiated contracts among fund managers and broker-dealers.
Cuomo's office, Markit and DTCC declined to comment. Bloomberg was not
immediately available for comment.
Bloomberg competes with Thomson Reuters Corp in providing news and market
data.
The CDS market has emerged as a closely-watched barometer for investors,
as a number of corporate failures followed surging costs in their protection
costs. The $55 trillion market has also been accused of fueling turmoil in other
financial markets and contributing to the collapse of companies like Lehman
Brothers Holdings Inc.
The U.S. Securities and Exchange Commission is investigating the CDS
market in connection with its probe of short-selling.
New York investigators last Thursday subpoenaed hedge funds from New
York, Texas and London, seeking information on their short-selling and CDS
activities, the person said. Broker-dealers already have also provided data
about these markets.
The state probe seeks data about short sales and swap deals since July 1,
with the primary focus on the past few weeks.
The probe is centered on stock and CDS trading activity surrounding
American International Group Inc, Goldman Sachs Group Inc, Lehman, Merrill Lynch
& Co, Morgan Stanley and Washington Mutual Inc.
(Additional reporting by Robert MacMillan, editing by Gerald E. McCormick)
((joseph.giannone@thomsonreuters.com; +1 646 223 6184; Reuters Messaging:
joseph.giannone.reuters.com@reuters.net)) Keywords: CUOMO/DEFAULTSWAPS PROBE
Chuck Mikolajczak
cm
COPYRIGHT
Copyright Thomson Financial News Limited 2007. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
*amM - keine Kaufempfehlung
LONG GNPH
LONG(v) NEOM
Eröffnunsspiel 3.Liga: RWE-SGD 0:1
DFB-Pokal 1.Runde '08: RWE-Bayern München 3:4
!! RWE-Jxxa 2:1