Say It Ain't So, Joe

"The UK's Serious Fraud Office [SFO] is investigating sales of structured products such as credit-default swaps and collateralized debt obligations, amid concern some bankers may have knowingly sold complex assets based on flawed valuations bewfore the global financial crisis struck two years ago. ... Richard Alderman, director of the [SFO], said [,] 'The question is not just were they mis-sold, because that gives rise to a number of regulatory issues, but was there actually fraud. Or in other words, did those selling them actually know they weren't worth what the institution said they were?'. .... 'Valuation cases are fraught with difficulty, but the weight that certain financial products were made to bear was untenable,' said Glyn Powell, joint interim head of the SFO unit responsible for London's financial district. ... The office also is doing more to support whistle-blowers when they come forward and taking a closer look at accounting matters, [Alderman] said", Dominic Elliott and Matt Turner at the WSJ, 3 August 2009, link: http://online.wsj.com/article/SB124924962560099895.html.

I wish London's SFO well. Now if the SEC would investigate serious frauds as opposed to opening and closing nickel and dime cases it might be useful to investors. We'll see how well the DOJ does with its CDS investigation.