In this election year, there certainly is no shortage of political rhetoric and drama in every debate and speech we encounter, including the recent State of the Union address by President Obama. In the address, President Obama addressed the latest of this administration’s efforts to thwart the woes of the housing market.
The president promised an expanded federal task force to crack down on the improprieties of financial firms for their part in the housing market collapse. This unit is housed within the purview of the Financial Fraud Enforcement Task Force and will be led by co-chairman Eric Schneiderman, attorney general for the State of New York, who is commonly referred to as the “Sheriff of Wall Street.”
The Financial Fraud Enforcement Task Force came into existence in 2009 to coordinate federal efforts to confront insider trading and investment scams and has been only moderately successful at best.
Schneiderman’s new unit will include attorneys, investigators and representatives from the Department of Housing and Urban Development,
The unit’s focus will be different than the investigations already undertaken by the Securities and Exchange Commission and the Justice Department. Notwithstanding settlements in the past, “this task force will focus on coordinating the often overlapping state and federal investigations and on holding accountable those whose misconduct led to the global financial crisis,” reported the Los Angeles Times.
Schneiderman is most notable for his refusal to align himself with the other attorneys general in settling with the banks on alleged robo-signing abuses. The grounds for his opposition to the settlement appear to be the banks’ immunity to further prosecution for additional improprieties.
Schneiderman may prove to be the right person at the right time to lead this new investigative unit. His group is not wasting anytime, as subpoenas have already been served to several large financial institutions as part of an investigation into possible instances of fraud involving mortgage backed securities.
Still, Schneiderman may be plagued with a very short window to work within and a judiciary system that is notoriously glacial.
Diane Gozza is executive vice president, business development, Integrated Mortgage Solutions, Houston.
