Justice Department Establishes Residential Mortgage-Backed Securities Working Group


At a press conference on January 27, 2012, Attorney General Eric Holder, accompanied by the SEC Director of Enforcement, the Secretary for the Department of Housing and Urban Development, the Assistant Attorney General for the Civil Division, and the New York Attorney General, among others, announced that the formation of a new Residential Mortgage-Backed Securities Working Group ("Working Group") within the current Financial Fraud Enforcement Task Force ("Task Force"). The Working Group’s task will be to "streamline and strengthen current and future efforts to identify, investigate, and prosecute instances of wrongdoing in the packaging, selling, and valuing of residential mortgage-backed securities."

SEC Director of Enforcement Robert Khuzami noted in his remarks at the press conference that "mortgage products were in many ways ground zero for the financial crisis. The collapse in value of mortgage-backed securities resulted in unprecedented losses, and all of us in law enforcement are dedicated to holding accountable financial institutions that lied and cheated and misled investors." Attorney General Holder noted that the Working Group would include 15 attorneys at Department headquarters and at United States Attorney’s Offices, and 10 Federal Bureau of Investigation special agents and analysts, with additional staffing to be added in the coming weeks. Recognizing that not all reckless or unethical conduct in the RMBS industry is criminal in nature, Attorney General Holder also emphasized the availability of civil sanctions and announced that the Department had recently issued civil subpoenas related to the market for RMBS to 11 financial institutions. He promised that "more will follow."

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cadwalader, Wickersham & Taft LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.