CDOs: Caveat Emptor Warn Structured Finance Experts

By Martin de Sa'Pinto, Senior Financial Correspondent
LIPPER HedgeWorld (Reuters) May 14, 2007

CHICAGO (HedgeWorld.com)

...Even when the securitizations are private placements, the purchasers sometimes have hired experts that say that there is little time to do due diligence, because the investors have to make up their minds quickly or risk missing out on the deal.

"Yet, that is a poor excuse for not doing due diligence, particularly for private placements that are sold to sophisticated investors who are meant understand what they are buying," said Janet Tavakoli, president of Chicago-based Tavakoli Structured Finance. "If buyers have not done the work to adequately understand their risks, then they shouldn't buy the product."

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