There's never only one cockroach:The Wall Street Journal says that the SEC is scrutinizing the books of the major brokerage firms to make sure that they're not sweeping subprime associated losses under the rug:
The SEC is looking into whether Wall Street brokers are using consistent methods to calculate the value of subprime-mortgage assets in their own inventory, as well as assets held for customers such as hedge funds, the same people said. The concern: that the firms may not be marking down their inventory as aggressively as assets held by clients.
While the issue is a technical one, and such checks occur routinely, it is sensitive for the markets. That is because, at least through their latest earnings reports, few big Wall Street firms have reported big subprime losses despite the turmoil roiling the markets.
The SEC checks are expected to include the top five Wall Street firms and the securities units of major commercial banks. Among the first firms to be looked at are Goldman Sachs Group Inc. and Merrill Lynch & Co., according to people familiar with the inquiry....
Seeking Hidden Losses, Regulators Comb Books Of Wall Street Titans - Wall Street Journal
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