Wall Street banks are facing criticism for packaging mortgages into securities and selling them to pension funds and money- market funds

Securities and Exchange Commission (SEC), the American stock exchange regulator, is seriously scrutinising the sale of bonds based on life insurance policies to come to a conclusion whether the procedure is fair to policyholders as well as investors – reported Bloomberg.

Speaking to members of the House Agriculture Committee, Mary Shapiro, chairman of SEC, said that none of the insurance policies sold as securities have been registered with the SEC. “It’s an area I’m profoundly concerned about. It raises “multiple sales-practice issues,” he said.

It has been widely reported that Wall Street firms had bundled the life insurance policies into bonds and securities and sold them to pension funds and money- market funds that failed to estimate the risks. Mr. Shapiro has added that SEC formed a task force to review instances when investment banks were involved in such pratices, reported the news agency.