Attorney General Andrew Cuomo has launched an investigation of eight banks in order to ascertain whether they provided “misleading information” to rating agencies in an attempt to inflate the grades of certain mortgage securities, the Times is reporting tonight, based on two sources with knowledge of the investigation. The agencies have been criticized in the past for “overstating the quality of many mortgage securities that ended up losing money once the housing market collapsed.” Cuomo’s current priority is uncovering the information that the banks provided to the rating agencies, as well as deducing whether the bankers knew that the ratings were overly positive. The targeted banks? Goldman Sachs, Morgan Stanley, UBS, Citigroup, Credit Suisse, Deutsche Bank, Crédit Agricole, and Merrill Lynch, which is now owned by Bank of America.
