The Residential Mortgage-Backed Securities (RMBS) Working Group unveiled a new website on Thursday to enable "whistleblowers" to report mortgage-backed securities (MBS) related misconduct. The group also announced the creation of a new team to coordinate various securities-related investigations around the country.
The Working Group is part of the Financial Fraud Enforcement Task Force (FFETF) created in January to address fraud leading to the financial crisis. The group is led by five co-chairs representing the civil and criminal divisions of the Department of Justice, the Securities and Exchange Commission, and two attorneys general from New York and Colorado. According to a press release, the working group and its members are focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities.
The new website, www.stopfraud.gov/rmbs.html is designed as a "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, according to Acting Associate Attorney General Tony West. He said that while the working group has done a tremendous amount of investigative work already and has issued more than 24 civil subpoenas, it is particularly valuable to hear from insiders. "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. We want to hear from them."
He stressed that whistleblowers enjoy special legal protection and said that if they summon the courage to report to the group "we will do everything we can to maintain their confidence and trust."
Each of the Working Group co-chairs has access to different investigative resources and each has brought existing investigations to the table so the new team announced Thursday will attempt to facilitate communication and coordination among the various agencies conducting investigations nationwide. The new team will consist of criminal prosecutors, civil attorneys and FBI investigators who are coordinating federal and state investigations nationwide. The team will be chaired by Matthew Stegman, a career white-collar prosecutor.