The SEC's Miami office is recommending enforcement action against Bear Stearns for its involvement in the pricing, analysis and valuation of some $62.9 million of CDOs it sold to Puerto Rican bank Westernbank Puerto Rico, which is owned by W Holding Co., Bloomberg reported late last week. Bear disclosed in a July 11 Securities & Exchange Commission filing that both the SEC and New York Attorney General Eliot Spitzer are investigating Bear Stearns' CDO trading practices with clients (see ASR 7/18/05).
The investment bank also received a subpoena from Spitzer's office asking for information related to roughly $16 million of CDOs purchased by one of its clients, according to the filing. Bear did not disclose whether the two inquiries were related.
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