SEC Is Probing Dealings by Banks and Companies in Loan Securities

The Securities and Exchange Commission is investigating a Wall Street boom in complicated bond deals. SEC investigators are looking at whether banks and companies are using the bond deals to hide certain risks illegally, said the people close to the probes. The probes could pose a new legal headache for banks, which have faced years of government investigations and large financial settlements involving their conduct leading up to the financial crisis. In previous investigations, the SEC primarily explored how the banks put the deals together. The new probes look at how these complex securities are being used and traded.

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