Picking Up Where Spitzer Left Off

Today, The Wall Street Journal reported that New York attorney general Andrew Cuomo's office has issued subpoenas to several investment banks requesting information about the packaging and selling of debt tied to high-risk mortgages.  The investigation, reminiscent of former attorney general Elliot Spitzer's high-profile inquiries into Wall Street's research practices a few years ago, is looking into how closely investment banks such as Merrill Lynch, Bear Stearns and Deutsche Bank evaluated the quality of mortgages before bundling and then selling them to investors.  According to the Journal, "Among the questions is whether this effort was adequate, or if securities firms had a duty to do further due diligence."