55 Federal Bureau of Investigation agents, prosecutors, and analysts have been dispatched by the US government to join up with state law enforcement officials as part of a financial crimes enforcement unit that will investigate how home mortgage abuses played a part in creating the economic meltdown of 2008. The Residential Mortgage-Backed Securities Working Group is headed by the US Department of Justice and New York Attorney General Eric Schneiderman (D). More lawyers, investigators, and support staff will be joining the team in the weeks to come.
Residential Mortgage-Backed Securities were the large investment packages of what proved to be comprised of close to worthless mortgages that not just helped spur on the country’s economic collapse but also bankrupted a lot of investors. SEC enforcement director Robert Khuzami has called the mortgage products the “ground zero” of the crisis.
During his State of the Union speech last week, President Obama announced the expanded federal-state probe that would be conducted by this working unit. The RMBS working group will have collective authority to look into abuses involving all areas of the financial services industry, including the selling, packaging, and valuing of residential MBS.
At a press conference on January 27, Attorney General Eric Holder said that this deeper look into what caused such “massive market failures” that continue to hurt homeowners will undoubtedly improve how financial losses can be recovered and fraud is prevented while shedding light on abuses and holding the responsible parties accountable. New York Attorney General Eric Schneiderman, who was also at the conference, said that the sharing of information between state and federal investigators would undoubtedly yield far-reaching results. Just in the past few days, investigators have sent out civil subpoenas to 11 financial firms with more to come. The RMBS Working Group intends to:
• Hold institutions accountable when they violate law
• Compensate victims and provide homeowners who are in trouble because of the housing market’s collapse with relief
• Help the nation gain closure on what happened in 2008
The RMBS Working Group will be run under President Obama’s Financial Fraud Enforcement Task Force (FFETF).
Holder has been quick to dispute speculation that the working group was set up because fraud enforcement efforts have so far been below adequate. He noted the recent string of successful civil lawsuits and prosecutions involving securities fraud, investment fraud, and bank fraud. Sentences for those convicted have totaled 150 years behind bars.
Our securities fraud lawyers continue to work with institutional and individual clients that have suffered huge financial losses as a result of residential mortgage-backed securities and the economic crisis of 2008. We may be able to help you recover your losses. Contact Shepherd Smith Edwards and Kantas, LTD, LLP today.
More Blog Posts:
Former Brookstreet Securities Broker Who Promoted Subprime Mortgages Commits Suicide, Institutional Investor Securities Blog, January 7, 2012
Investors Want JP Morgan Chase & Co. To Explain Over $95B of Mortgage-Backed Securities, Institutional Investor Securities Blog, December 17, 2011
FDIC Objects to Bank of America’s Proposed $8.5B Settlement Over Mortgage-Backed Securities, Stockbroker Fraud Blog, August 30, 2011