Rep. Edward J. Markey last week called for an inquiry into whether the Office of the Comptroller of the Currency encouraged BankAmerica Corp. to delay disclosure of a multimillion-dollar loss to a hedge fund.
In an Oct. 16 letter to Securities and Exchange Commission Chairman Arthur Levitt, the Massachusetts Democrat said he was concerned by a published report that the OCC knew about the loss and had approved the bank's investment strategy that caused it.
BankAmerica announced Oct. 14 a $372 million chargeoff for a loan to the New York hedge fund D.E. Shaw & Co. A group of shareholders filed a suit the next day.
"This development only underscores my concern over the competency of the OCC to oversee risky securities activities," wrote Rep. Markey. Banks should have to comply with the reporting requirements of federal securities laws, he said.
An OCC spokesman said that BankAmerica was solely a lender to D.E. Shaw, so securities law did not apply.