NYT-

On the eve of the financial crisis, the hedge fund manager Bruce M. Rose did a surprising deal that took his firm into the business of collecting mortgage payments from people with tainted credit.

Now, seven years later, securities regulators are scrutinizing the deal, looking in particular at how part of it was financed.

The Securities and Exchange Commission last fall began to subpoena documents from Mr. Rose’s Carrington Holding Company about the purchase of mortgage servicing operations from the failed subprime lender New Century Financial, according to regulatory filings. The previously unreported investigation is seeking information about how Carrington financed the $188 million deal, which relied in part on the firm’s later issuing special securities to the investors in its hedge fund.

[NEW YORK TIMES]

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