Attorney General Eric Holder has announced the formation of the new Residential Mortgage-Backed Securities Working Group which will operate as part of the Financial Fraud Enforcement Task Force. Recognizing that enormous failures in the residential mortgage-backed securities market were a significant force in the collapse of housing markets across the nation, it was determined that a new working group with broad talents and resources was needed to address the issue.
Attorney General Holder explained that the working group would pursue both criminal prosecutions and suits for civil sanctions, depending on the character of the misconduct uncovered. Given the damage unleashed on the American people and the devastation that has resulted in too many of our communities, Attorney General Holder declared, “My number one commitment to the American people is that we will continue to devote significant resources to combating financial fraud and be as aggressive and creative as we can be in holding accountable those who, in violating the law, contributed to the financial crisis.”
The working group, which includes representatives of federal, state, and local partners, will investigate alleged misconduct in the mortgage-backed securities market. The working group will begin its work immediately to identify, investigate, and prosecute wrongdoing in packaging, valuing, and selling of residential mortgage-backed securities. In fact, Attorney General Holder reported that civil subpoenas had already been issued to 11 financial institutions in connection with the investigation of wrongdoing in the mortgage-backed securities market.
Information from whistleblowers aware of the misconduct at issue may be invaluable to the U.S. government in trying to hold these wrongdoers accountable.