Finra Said to Probe Morgan Stanley, Barclays, Credit Suisse

A Financial Industry Regulatory Authority investigation of abuses in mortgage-linked investments has focused on the activities of Morgan Stanley, Barclays PLC and Credit Suisse Group AG, a person with direct knowledge of the matter said.

The brokerage regulator has sought information on so-called synthetic collateralized debt obligations the firms created, according to the person, who declined to be identified because the inquiry is confidential. Finra has concentrated on whether the banks became mired in a conflict of interest by betting that their own CDOs, tied to home loans, would lose value.