Is Deutsche Bank next on the SEC's target list?

German bank IKB Deutsche Industriebank, which lost millions through its Abacus deal with Goldman Sachs in 2007, seems to have been dealing with other investment banks that sold collateralized debt obligations to hedge exposure to the housing market. Sales traders at Deutsche Bank sold CDOs to IKB, and the portfolio of mortgage-backed instruments in these products were also selected by Paulson & Co. Like Goldman, Deutsche did not disclose Paulson's role in the construction of the CDOs to IKB, but Deutsche's deal did not have a third-party collateral manager, which may save Deutsche from potential Securities and Exchange Commission action. The Atlantic (4/26)

Related Summaries