It has only been three days since the Residential Mortgage-Backed Securities Working Group was made public, and several subpoenas have already been handed out.
The task force was unveiled Tuesday night in President Barack Obama’s state of the union address. It will operate as part of the Financial Fraud Enforcement Task Force.
U.S. Attorney General Eric Holder said in a prepared statement that task force members have already been conducting investigations into the RMBS market and other related aspects of the housing market for some time.
“They’ve seen firsthand how massive failures in this market were a driving force behind the nationwide housing collapse that has had devastating effects for investors, consumers and entire communities,” Holder said of task force members.
So far, the Justice Department has dedicated 15 attorneys, investigators and analysts to the cause, and another 30 are expected to be assigned in the coming weeks. The Federal Bureau of Investigation has assigned 10 agents to the group.
Senior officials from the Justice Department, the Securities and Exchange Commission will co-chair the working group, while co-chair and New York Attorney General Schneiderman will lead the effort from the state level.
The group is holding its first meeting today. Its objectives are 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,” Holder stated.
Holder said criminal charges will be filed when evidence wrongdoing is found, while civil procedures will be used in non-criminal cases.
Civil subpoenas have already been issued in connection with current RMBS investigations to 11 financial institutions, according to Holder, “and you can expect more to follow.”
Holder touted prison sentences ranging from 20 years to 60 years that the Justice Department previously achieved in financial fraud cases.