Tuesday, July 29, 2008

Interesting - and negative for Ambac

GE used to be in the bond insurance game. It sold GICs as per Ambac and MBIA.

This news story (repeated below) suggests that GE is being investigated as part of an industry wide probe into the marketing of these contracts.

Presumably that investigation includes Ambac and MBIA - and it differs from other investigations going on into those companies.

This is negative.


GE finance unit says 2 units probed over marketing
Monday July 28, 10:14 am ET

GE finance arm says 2 units are being examined over marketing, sales of financial instruments HARTFORD, Conn. (AP) -- The finance arm of General Electric Co. says two units are being investigated in connection with an industrywide probe into marketing and sales of guaranteed investment contracts and other financial instruments to municipalities.

In a filing Friday with the U.S. Securities and Exchange Commission, General Electric Capital Corp. said GE Funding CMS and GE Funding Capital Market Services Inc. have been subpoenaed for information.

GE Funding Capital Market Services has received notice that the SEC staff may recommend that the agency bring a civil injunction or begin an administrative proceeding in connection with the bidding for financial instruments associated with municipal securities by former employees of GE Funding Capital Market Services.

General Electric Capital said it is cooperating with the SEC and antitrust division of the Department of Justice.

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