Securities and Exchange Commission (SEC) Chairman Christopher Cox called Tuesday for regulation of certain credit derivative products, saying the market was overrun by fraud that contributed to the housing crisis.

At a Senate Banking Committee hearing, Cox said the SEC is investigating the market. "Legislation has expressly excluded CDS from regulation, even of the most modest kind — even disclosure," Cox testified. "We have a big regulatory hole around CDS … . It's vitally important that we regulate this so we can have disclosure, we can have transparency."

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