{"id":6744,"date":"2007-11-02T00:00:00","date_gmt":"2007-11-02T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"deals-with-hedge-funds-may-be-helping-merrill-lynch","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/11\/2007\/deals-with-hedge-funds-may-be-helping-merrill-lynch.html","title":{"rendered":"Deals With Hedge Funds May Be Helping Merrill Lynch"},"content":{"rendered":"<p class=\"times\">  Wall Street Journal- <a class=\"times rolloverQuote\" href=\"..\/quotes\/main.html?type=djn&amp;symbol=mer\">Merrill Lynch<\/a> &amp; Co., in a bid to slash its exposure to risky mortgage-backed  securities, has engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses, people close to the situation said.<\/p>\n<p class=\"times\">  The transactions are among the issues likely to be examined by the Securities and Exchange Commission. The SEC is looking into how the Wall Street firm has been valuing, or &#8220;marking,&#8221; its mortgage  securities and how it has disclosed its positions to investors, a person familiar with the probe said. Regulators are scrutinizing whether Merrill knew its mortgage-related problem was bigger than  what it indicated to investors throughout the summer.<\/p>\n<p class=\"times\">  In one deal, a hedge fund bought $1 billion in commercial paper issued by a Merrill-related entity containing mortgages, a person close to the situation said. In exchange, the hedge fund had the  right to sell back the commercial paper to Merrill itself after one year for a guaranteed minimum return, this person said.<\/p>\n<p class=\"times\">  While the Merrill-related entity&#8217;s assets and liabilities weren&#8217;t on Merrill&#8217;s own balance sheet, Merrill might have been required to take a write-down if the entity was unable to sell the  commercial paper to other investors and suffered losses, the person said. The deal delayed that risk for a year, the person said.<\/p>\n<p class=\"times\">  In a statement, a Merrill Lynch spokeswoman said, &#8220;We don&#8217;t comment on specific transactions and we are confident in the appropriateness of our marks.&#8221;<\/p>\n<p class=\"times\">  <a href=  \"http:\/\/news.google.com\/news\/url?sa=T&amp;ct=us\/1-0&amp;fd=R&amp;url=http:\/\/online.wsj.com\/article\/SB119396956371280131.html%3Fmod%3Dgooglenews_wsj&amp;cid=1122745988&amp;ei=FOYqR9acOqiGqwPoq4WDDQ\">  <strong>Read Complete Article<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wall Street Journal- Merrill Lynch &amp; Co., in a bid to slash its exposure to risky mortgage-backed securities, has engaged in deals with hedge funds that may have been designed to delay the day of reckoning on losses, people close [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-6744","post","type-post","status-publish","format-standard","hentry","category-syndicated"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/6744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=6744"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/6744\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=6744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=6744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=6744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}