The request came at a crucial moment. In the last months of 2007, investors had grown skittish about such investments amid signs that the housing bubble was deflating, if not bursting. Up and down Wall Street, banks were trying to persuade ratings agencies that large portions of their mortgage-backed securities merited the coveted AAA stamp, meaning that they posed negligible risks of default. The analyst was asked to alter the spreadsheets in order to get a better rating, the person said.

Two things here: First, as we get further out from the height of the bubble and financial crisis, we’re naturally seeing fewer stories about it. So hat’s off to the reporters still trying to show us what happened there, because so much of it is still untold.

Second, Mollenkamp and ProPublica are good to shine some spotlight Robert Khuzami’s way. He’s the SEC’s director of enforcement whose job during the crisis was CDO-churning Deutsche Bank’s top lawyer. As I once said, you wouldn’t hire Tom Hagen to investigate the olive-oil industry, why would you hire the top lawyer at one of Wall Street’s top CDO producers, who “oversaw Deutsche CDOs,” in the WSJ’s words, to investigate Wall Street’s actions with CDOs and the like? The conflict is untenable no matter how upstanding Khuzami might be. It’s a conspiracy theorist’s dream come true.

Mollenkamp puts the SEC angle up high, noting that the analyst who raised questions at Deutsche has never been interviewed by the government:

But four years later, the revelation that an analyst protested raises questions about how vigorously, if at all, the government is investigating Deutsche Bank and its practices leading up to the financial crisis. In any case, ProPublica has learned, neither the S.E.C. nor any other government regulator or law-enforcement agency has interviewed the analyst.
The SEC’s director of enforcement is Robert Khuzami. Before joining the SEC in 2009, he had been Deutsche Bank’s general counsel for the Americas since 2004. He worked as one of the bank’s top lawyers during the time the analyst raised questions. Khuzami has said he would recuse himself from any actions regarding Deutsche.
Another key SEC official — George Canellos, who oversees enforcement for the New York regional office — used to be a corporate lawyer who defended Deutsche against M&T Bank Corp. M&T, which was suing Deutsche over a security similar to the one the analyst raised objections to, had sought to depose the analyst and obtain the results of Deutsche’s internal inquiry, according to people familiar with the lawsuit.

Very good stuff.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at