AG Holder Announces Structure of MBS Fraud Unit

The formation of the ResidentialrnMortgage-Backed Securities Working Group tasked with investigating mortgagernfraud is now official.  The new office,rnwhich will be part of the Administrations Financial Fraud Enforcement TaskrnForce (FFETF) was first announced by President Obama in his State of the Unionrnspeech on Tuesday.</p

At a press conference this morning (video below), Attorney General Eric Holder along withrnHousing and Urban Development (HUD) Secretary Shaun Donovan, Securities andrnExchange Commission (SEC) Director of Enforcement Robert Khuzami and New YorkrnAttorney General Eric T. Schneiderman, Holder outlined the mechanics of the workingrngroup which will bring together the Department of Justice (DOJ), several staternattorneys general and other federal entities to investigate those responsiblernfor misconduct contributing to the financial crisis through the pooling andrnsale of residential mortgage-backed securities. rnThe group will consist of at least 55 DOJ attorneys, analysts, agents,rnand investigators from around the country including the 15 civil and criminalrnattorneys and 10 FBI agents already employed in the FFETF unit.  This team will join existing state and federalrnresources investigating similar misconduct under those authorities.</p

Holder said that the goal of the group will be to hold accountable anyrninstitutions that violated the law; to compensate victims and help providernrelief for homeowners struggling from the collapse of the housing market,rncaused in part by this wrongdoing and to help turn the page “on thisrndestructive period in our nation’s history.”</p

Holder confirmed the principal staff that we identified here earlier thisrnweek:  Schneiderman will chair the grouprnwith co-chairs Khuzami, Lanny Breuer, Assistant Attorney General, Criminal Division,rnDOJ; John Walsh, U.S. Attorney, District of Colorado; and Tony West, AssistantrnAttorney General, Civil Division, DOJ. rnSchneiderman will lead the effort from the state level and will bernjoined by other state attorneys general.</p

Schneiderman said, “In coordination with our federal partners, our officernwill continue its steadfast commitment to holding those responsible for thernmortgage crisis accountable, providing meaningful relief for homeownersrncommensurate with the scale of the misconduct, and getting our economy movingrnagain.  The American people deserve a thorough investigation into thernglobal financial meltdown to ensure nothing like it ever happens again, andrntoday’s announcement is a major step in the right direction.”</p

The new office has been the target of criticism from Wall Street since thernPresident’s announcement such as that from JP Morgan Chase CEO Jamie Dimon who saidrnthe working group would “derail” the proposed settlement between the states andrnmajor banks, and Jaret Seiberg,rnSenior Vice President of the Washington Research Group who told CNBC that thernsole purpose of the group is to bring criminal charges against bankers.</p<prnrnrnrnrnrnrnrnrnrnrn

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