MBIA Subpoenaed In Financial Products Probe
NU Online News Service, Nov. 19, 2:40 p.m. EST?MBIA Inc. said it has received subpoenas from both the Securities and Exchange Commission and New York Attorney General Eliot Spitzer's office in an investigation into sales of products that companies have used to skew their financial statements.[@@]
The Armonk, N.Y.-based financial services company said the information requested relates to "non-traditional or loss mitigation insurance products developed, offered or sold by MBIA to third parties from Jan. 1, 1998 to the present."
MBIA went on to say that the subpoenas do not identify any specific transaction, and the company believes the probe is part of the ongoing investigation by the SEC and Mr. Spitzer. The company added it intends to cooperate fully with the requests.
The two agencies are investigating whether the use of such non-traditional products, known as loss mitigation insurance products, improperly props up the earnings reports of companies that take out the policies.
So far, insurers who have acknowledged receiving similar subpoenas include St. Paul Travelers in St. Paul, Minn.; Ace Ltd. and Platinum Underwriters Holdings, both based in Bermuda; and Zurich Financial Services, Zurich, Switzerland.
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