MA Securities Regulator Subpoenaed MBIA and Ambac to Assess Risk in Securities
On Wednesday Massachusetts' top securities regulator stated that he requested information from bond insurers MBIA Inc and Ambac Financial Group last week in a probe about their exposure to high risk securities.
State's Secretary William Galvin reported that he is trying to determine if the insurers informed Massachusetts communities that were trying to raise money about the insurers' own exposure to collateralized debt obligations.
The insurers were subpoenaed last week and are required to deliver a list of Massachusetts public issuer bonds issued in the last two years for which they have insured repayment of principal or interest by Feb. 1, Galvin said.
"The market relies on the insurance provided by these companies to price the bonds and to insure that investors get paid in the event of a default," Galvin said in a statement, adding, "If the credit quality of these companies comes into question, the impact on cities and towns is enormous."
Published on January 24, 2008
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