by The Compliance Exchange on July 19, 2012
Mizuho Financial Group Inc settled civil charges its U.S. unit obtained false credit ratings on a 2007 mortgage bond deal stuffed with subprime assets, in the latest case to come out of the financial crisis.
The U.S. Securities and Exchange Commission’s lawsuit charged Mizuho Securities USA Inc of using “dummy assets” in a complex product better known as a “CDO” in order to obtain rosier ratings from agencies including McGraw Hill’s Standard & Poor’s.
CDOS are bundles of securitized mortgages. Leading up to the financial crisis, many of the mortgage-backed assets included in the CDOS consisted of subprime loans that later soured.
Read the full story at Reuters.
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