The Department of Justice’s consumer protection working group launched a new website this week for whistleblowers to report residential mortgage-backed securities fraud taking place throughout the country.
Whistleblowers can
The working group investigates potential false or misleading statements, deception or other type of misconduct when mortgage-backed securities are created and sold.
“The RMBS website is a new call to those insiders who know about fraud that occurred in the RMBS market, who know it's time to expose that fraud, and who want to help us hold accountable those individuals and institutions who broke the law in pursuit of bigger paydays," said Tony West, acting associate attorney general.
West said whistleblowers who provide information through the website will receive legal rights that prevents an individual accused of RMBS fraud from retaliating against the whistleblower.
Since it was formed in February under President Barack Obama’s Financial Fraud Enforcement Task Force in February, the working group has issued more than 25 civil subpoenas. But West said hearing from insiders is particularly valuable in order to reveal even more fraudulent activity that could be taking place.
“There are scores of people who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy,” West added. “We want to hear from them."
Co-chairs that make up the working group include Lanny Breur, assistant attorney general for the Department of Justice’s criminal division; Stuart Delery, acting assistant attorney general for the civil division; John Walsh, U.S. attorney for the district of Colorado; Robert Khuzami, director of enforcement for the U.S. securities and exchange commission; and New York Attorney General Eric Schneiderman.
In order to facilitate communication among the various agencies that are conducting RMBS investigations nationwide, the working group has also created a new coordinating team. Matthew Stegman, a prosecutor for the Department of Justice, was appointed the leader of this new coordination team, which is comprised of criminal prosecutors and civil attorneys, analysts and FBI investigators.
“The working group's approach to RMBS investigations is systematic and smart—cross-agency teams comprised of experienced prosecutors and investigators utilizing market experts and risk-based criteria to triage transactions for review, and bringing to bear the entire palette range of state and federal legal theories and remedies," Khuzami said. “The numbers reveal the working group effort and commitment, in which all agencies are focused on whether firms failed to disclose important information when selling RMBS securities.”
