AG: 11 Institutions Subpoenaed in Mortgage Securities Probe

Eleven financial institutions were recently issued subpoenas related to a newly expanded federal-state effort to crack down on misconduct in the mortgage-backed securities market, U.S. Attorney General Eric Holder said today.
The new “Residential Mortgage-Backed Securities Working Group” had its first full meeting today after a press conference by Holder.
The group is to “streamline and strengthen” other law enforcement efforts of wrongdoing in the “in the packaging, selling, and valuing of residential mortgage-backed securities,” Holder said.
However, Holder would not give any details on the subpoenas.
“Of course, I can’t go into detail about our existing investigations.” Holder said. “But I can tell you that significant efforts are moving forward, by both federal and state authorities.  And I can assure you that, if we uncover evidence of fraud or other illegal conduct, we will bring the appropriate criminal or civil charges.”
President Obama mentioned the new mortgage crimes unit during his state of the union speech this week, vowing to hold accountable those who helped cause the housing market collapse and financial crisis.
“Over the past three years, we have been aggressively investigating the causes of the financial crisis,” Holder said. “And we have learned that much of the conduct that led to the crisis was – as the President has said – unethical, and, in many instances, extremely reckless.”
The size of the new task force is substantial. Currently, 15 attorneys, investigators, and analysts – at Justice headquarters and throughout U.S. attorneys’ offices – are supporting the Working Group, Holder said.  The FBI also has assigned 10 agents and analysts to work with the group.
In coming weeks, another 30 attorneys, investigators, and support staff from U.S. attorneys’ offices will join the effort, he said.

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