SEC Probes Deutsche Bank CDO Deal With Paulson, Spiegel Says

The U.S. Securities and Exchange Commission is investigating a collateralized debt obligation transaction in which Deutsche Bank AG allowed U.S. hedge fund Paulson & Co. to select mortgage-backed securities, Der Spiegel reported.

For a CDO called “START,” the bank allowed Paulson to bet against the securities without telling other investors, the German magazine said on its website. Goldman Sachs settled a suit by the SEC for $500 million over a similar transaction, according to Der Spiegel.