Regulators never thought investors would be gullible enough to buy Hertz ‘garbage,’ Harvey Pitt says


The former top securities regulator for the United States said Tuesday that policymakers never considered there would be a market for bankrupt companies like Hertz to issue new stock and that, if things went poorly, investment banks could be on the hook.

Harvey Pitt, who served as chairman of the Securities and Exchange Commission under President George W. Bush, said on CNBC’s “Squawk Box” that the disclosure for Hertz’s secondary stock offering could have been “far more aggressive.” With the rental car company already bankrupt, potential legal action would focus on the banks, he said. 

“Investment banking firms have liability, and when they offer securities one of the issues that will…


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