William F. Galvin, Massachusetts secretary of the commonwealth, subpoenaed municipal bond insurers MBIA and Ambac Financial Group to see if they had adequately informed Massachusetts communities and investors of those firms exposure to risky securities, such as CDOs. In a news release issued by Mr. Galvins office today, the two companies were asked to provide by Feb. 1 a list of Massachusetts public bonds issued since January 2006 that they insured. If the credit quality of these companies comes into question, the impact on cities and towns is enormous, raising costs to municipalities and increasing investors risk, Mr. Galvin said in the release. Brian McNiff, a spokesman for Mr. Galvin, wasnt immediately available for comment.
MBIA spokesman Willard Hill and Ambac spokesman Peter R. Poillon couldnt immediately be reached for comment.