updated 11/7/2007 1:21:59 AM ET 2007-11-07T06:21:59

TOKYO (Reuters) - The U.S. Securities and Exchange Commission is looking at whether or not U.S. banks exercised proper disclosure when announcing their investments in subprime-mortgage products, SEC Chairman Christopher Cox said on Wednesday.

The SEC was also continuing to investigate the role of ratings agencies in the subprime crisis, but has yet to determine where "next to head," Cox said.

Cox, in Tokyo to participate in a conference of financial regulators, told a group of reporters the SEC, along with other agencies, was trying to determine if banks had practiced sufficient disclosure about subprime investments.

"The kind of inquiry that's being undertaken that I'm describing is analytical," Cox said.

"Right now we're focused on analysis, but our enforcement division never rests."

U.S. bank Citigroup Inc said on Sunday it might suffer an $11 billion write-down for subprime losses, on top of $6.5 billion it wrote off three weeks ago.

In a note to clients, JPMorgan analyst Kabir Caprihan said Citigroup's management did not disclose its exposure or even hint at a possible write-down during an analyst call two weeks ago.

Cox gave little indication of how the commission's investigation of ratings agencies would advance.

The SEC has said it is investigating whether credit-rating firms were unduly influenced by issuers and underwriters of products related to subprime mortgages.

Credit rating agencies have been criticized for not responding quickly enough to deteriorating conditions in the subprime market.

They have also been accused of conducting weak analyses and granting higher ratings because they are paid by the firms whose securities they rate.

"The plan that the SEC is working on includes the assignment of specialized personnel to a New York City office where major firms are headquartered," Cox said.

"As a result of our first round of inspections we will learn undoubtedly where next to head," he said.

He declined to say when the agency would be able to announce the findings of the inspections. The SEC began examining credit rating firms under a 2006 law that gives the SEC more oversight of the industry.

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