Joint probe of CDS market underway

In a collaboration that the New York Times calls unusual, New York state and federal prosecutors are joining forces to investigate possible manipulation in the market for credit default swaps. The focus seems to be on whether dealers artificially boosted the price of CDS on some bonds by reporting trades that never really happened. Data has been sought from Markit, the DTCC and Bloomberg. We'll see where this goes. The view seems to be that the market is so sprawling that joint action is the only way to go. Recall there's been some tension between the two camps, back when Eliot Spitzer regularly upstaged his federal counterparts. This could get interesting and just might fuel the movement to transition the market to an exchange.

For more:
- here's the article

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