CNN — The company that helped put a $1.8 billion bond to the credit of PPC stock will face criminal charges, a federal official told CNN Wednesday.
“They were not the ones that got into trouble,” the official said.
“These guys were, and this is the first time we have seen that.”
The official told ABC News the case was being investigated by the Justice Department’s civil rights division and that “there’s no evidence of any kind of criminal wrongdoing.”
The criminal complaint alleges that PPC had “bought and sold” bonds for PPC’s stock, which it sold on the public markets and in a hedge fund.
The complaint also alleges that the company paid out over $400 million in securities that it sold to PPC before the company went public.
The case has not been resolved and no charges have been filed.
The SEC has opened an investigation into PPC.
The Wall Street Journal first reported the criminal case and said federal prosecutors are looking into the matter.
The DOJ is the lead agency investigating PPC and PPC Management.
“I can’t comment on pending litigation, but I can tell you that we are taking this matter very seriously,” an SEC spokesperson told ABC.
The charges against PPC came just days after PPC announced that it had been placed under criminal investigation by the SEC.
A statement from the SEC said it has “received information indicating a possible violation of federal securities laws, including the anti-fraud provisions of the securities laws.”
A spokesman for PLC declined to comment on the criminal investigation, and PLC did not immediately respond to ABC News’ request for comment.
PPC declined to be interviewed for this story, but it issued a statement Wednesday saying, “We are cooperating fully with the SEC’s criminal investigation.”