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U.S. SEC Probes ‘Reverse Convertible Note’ Sales, WSJ Reports

The U.S. Securities and Exchange Commission is investigating whether investors were fully advised of drawbacks when they were sold a bond known as a “fully reversible note,” the Wall Street Journal reported, citing people familiar with the matter.

The SEC is checking to see if Wall Street banks which developed the bonds and then sold them to individual investors fully explained the risks and fees involved; the regulator is also investigating possible conflicts of interest, the newspaper said.