MBIA Subpoenaed In Financial Products Probe

NU Online News Service, Nov. 19, 2:40 p.m.EST?MBIA Inc. said it has received subpoenas from both theSecurities and Exchange Commission and New York Attorney GeneralEliot Spitzer's office in an investigation into sales of productsthat companies have used to skew their financialstatements.[@@]

The Armonk, N.Y.-based financial services company said theinformation requested relates to "non-traditional or lossmitigation insurance products developed, offered or sold by MBIA tothird parties from Jan. 1, 1998 to the present."

MBIA went on to say that the subpoenas do not identify anyspecific transaction, and the company believes the probe is part ofthe ongoing investigation by the SEC and Mr. Spitzer. The companyadded it intends to cooperate fully with the requests.

The two agencies are investigating whether the use of suchnon-traditional products, known as loss mitigation insuranceproducts, improperly props up the earnings reports of companiesthat take out the policies.

So far, insurers who have acknowledged receiving similarsubpoenas include St. Paul Travelers in St. Paul, Minn.; Ace Ltd.and Platinum Underwriters Holdings, both based in Bermuda; andZurich Financial Services, Zurich, Switzerland.