Breaking News

Subpoenas Issued to 11 Financial Institutions by New Federal Task Force
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

Last week, a new federal and state task force was created that will investigate mortgage fraud that helped contribute to the financial crisis of 2008. The new panel did not waste any time, issues subpoenas to 11 financial institutions.

Eric Holder, the United States Attorney General, said that the new unit is going to consist of 55 Justice Department lawyers and analysts along with 10 FBI agents who will work with state attorney general’s offices throughout the country. The task force will investigate how securities backed by mortgages were created, sold and valued by financial companies four years ago. The announcement for the new unit was made by President Obama during his State of the Union address.


“The Working Group will 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 said this past Friday at a press conference.

During his press conference, Holder also announced that the unit issued 11 subpoenas to various financial institutions but would not elaborate as to which institutions they were.

“You can expect more to follow,” Holder said. “Of course, I can’t go into detail about our existing investigations.  But I can tell you that significant efforts are moving forward, by both federal and state authorities.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

The unit is going to be led by heads of the Justice Department’s Civil and Criminal Division, John Walsh (U.S. Attorney from Colorado), Robert Khuzami (SEC Enforcement Director) and Eric Schneiderman (New York Attorney General).

The financial crisis has been investigated by the FBI, the SEC and the Justice Department ever since the recession hit but officials are hoping that the new unit will be able to use the New York State’s Martin Act. This act allows investigators broader powers to investigate fraud in the United States. The act also allows the state of New York to issue criminal and civil fraud charges without having to show intent to commit fraud.

Holder defended the Justice Department’s record in pursuing high profile financial fraud cases at his press conference on Friday.

“There have been, I guess, 2,100 or so mortgage-related matters that we have brought here at United State Department of Justice. Our state counterparts have done a variety of things. The notion that there has been inactivity over the course of the last three years is belied by a troublesome little thing called facts,” he said.

Neil Barofsky, the former inspector general who worked on the government’s Troubled Asset Relief Program (TARP), said, “I’m a little puzzled by it. Here we are three years later, launching what seems like a very similar effort, except now co-headed by a state attorney general.”

The new unit has also been criticized by leaders on Wall Street, including Jamie Dimon, the CEO of JP Morgan.

“It has a pretty good chance of derailing it,” Dimon said. “I think it would be better for America if that settlement took place…If this thing derails that, so be it.”

“I think this announcement today makes very clear that the focus that we have and the releases that are being contemplated are narrow enough to allow us to go forward with this while still completing a servicing settlement,”  HUD Secretary Shaun Donovan said.



Legal Assistant


We\'re looking for a personable and detail-oriented professional to join our team. The ideal candida...

Apply now

Associate Attorney- Family Law

USA-FL-Coral Springs

Scott J Brook PA is looking for a full-time Associate Attorney with at least 3 years of Family Law e...

Apply now

Attorney, Insurance Coverage

USA-CA-San Diego

Position Summary: Robertson & Associates, APC, a small, well-established AV-rated and Best̵...

Apply now



Job details Salary $80,000 - $110,000 a year Job Type Full-time Part-time Contract...

Apply now




Search Now

Associate Attorney

USA-CA-Woodland Hills

Woodland Hills office of a BCG Attorney Search Top Ranked Law Firm seeks an associate attorney with ...

Apply Now

Associate Attorney


Braintree office of our client seeks associate attorney with 1-5 years of experience in civil litiga...

Apply Now

Litigation Associate Attorney


Sacramento office of a BCG Attorney Search Top Ranked Law Firm seeks a litigation associate attorney...

Apply Now

Most Popular


To Top