Bond insurer MBIA has received notification from the US Securities and Exchange Commission indicating that a civil injunctive action may be brought against it following alleged violations of federal securities laws.
MBIA is said to have defaulted on bonds issued by a unit of Pittsburgh-based Allegheny Health, Education and Research Foundation. The company is now believed to be engaged in discussions with the SEC concerning the possible resolution of these charges.
In addition, MBIA is also in preliminary discussions with staff at the New York Attorney General’s Office and the New York State Insurance Department regarding the possible resolution of potential civil charges that might be brought in connection with the reinsurance transactions.
In light of the situation, MBIA said it was unable to predict the outcome of the investigations or whether its current efforts to resolve them will be successful.