June 14 Bank of America's (BAC.N) Merrill Lynch is
being investigated by the Securities and Exchange Commission over
its sale of a mortgage-related security created for an Illinois
hedge fund, the Financial Times reported, citing people familiar
with the matter.
The SEC is investigating whether Merrill told buyers that
hedge fund Magnetar helped select assets for a $1.5 billion
collateralized debt obligation (CDO) known as Norma, the paper
The top watchdog is also looking to see if Merrill mispriced
assets in the CDO, the Financial Times said.
The manager of the security, NIR Capital Management run by
Corey Ribotsky, is also being investigated to determine if it
fulfilled its obligations, the paper said, citing the same
Spokespersons for the SEC and Merrill were not available for
comment outside business hours.
(Reporting by Abhiram Nandakumar in Bangalore)