(May 13, 2010) — George Canellos, the head of the Securities and Exchange Commission’s Manhattan office and a former federal prosecutor, said he is urging his staff to scrutinize products traditionally sold to institutional investors, Bloomberg reported.

“The SEC is a little less willing to assume that if the product is sold to institutional investors we should be a little less concerned about it,” Carlos said an interview with Bloomberg Television. According to Canellos, institutional investors purchased products before the financial crisis that eventually became worthless, reflecting that even sophisticated buyers need additional protection. The SEC head is expanding his staff while focusing on structured products and on private exchanges, such as dark pools that trade stocks yet don’t display quote information publicly.

“My highest goal has been to reorient both our examination program and enforcement program toward some areas that have not been the traditional focus,” he said during the interview. “Traditionally, the SEC has placed a great deal of emphasis on retail investors and sales practices directed at retail investors.”

Separately, US prosecutors and the SEC are teaming up with a preliminary criminal probe into whether banks misled investors about their participation in mortgage-bond deals, the Wall Street Journal reported. The SEC has issued subpoenas to JPMorgan Chase & Co., Deutsche Bank AG, UBS AG and Citigroup Inc. Already, Goldman Sachs Group Inc. and Morgan Stanley are under investigation for allegedly misleading investors in collateralized debt obligations deals while betting that the derivatives would fall in value. Additionally, New York Attorney General Andrew Cuomo is probing eight firms over whether they misled rating companies.