US securities regulators plan to warn several major banks that they may sue them over the sale of bonds linked to sub-prime mortgages that ignited the financial crisis in 2008, the Wall Street Journal said, citing people familiar with the matter.
The US Securities and Exchange Commission (SEC) is looking at whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors, the people told the Journal.
It was not clear which firms will receive the formal SEC enforcement warnings, known as "Wells notices", the paper said.
Banks whose activities are being examined in the civil investigation include Ally Financial Inc, Bank of America Corp , Citigroup, Deutsche Bank and Goldman Sachs, the Journal said.
Ally Financial spokeswoman Gina Proia told Reuters that she could comment on the Journal report.
Representatives of the banks and SEC declined to comment, the Journal said.
None of the other parties could immediately be reached for comment by Reuters outside regular US business hours.
Speaking at a news conference in January, SEC enforcement director Robert Khuzami said his agency already reviewed 25 million pages of documents on mortgage-related investigations.
The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, sued 17 large banks last September over losses on about $200 billion (S$250 billion) of subprime bonds and said the underlying mortgages did not meet investors'criteria.