The Securities and Exchange Commission and New York Attorney General Eliot Spitzer are now investigating banks and specifically whether certain banks violated securities laws by extending credit to cash-loaded improper traders like hedge funds, according to published reports.

Spitzer told The Washington Post that the first phase of the investigation, which has already resulted in charges being brought against six mutual fund firms, has led him to start questioning how the market timing trades were financed. He did not mention any individual firms, but sources cite Bank of America and Canadian Imperial Bank of Commerce as two of the many banks both Spitzer and SEC enforcement head Stephen M. Cutler are probing.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.