U.S. goes "fishing" over RMBS practices
The Justice Department and other federal and state agencies are looking into bubble-era bank practices surrounding issuance of RMBS, going on what Clayton Holdings attorneys characterized as a "fishing expedition" is response to a government subpeona. Bloomberg reports:
Clayton Holdings LLC, objecting today to a July 1 subpoena seeking documents related to the firm’s work on residential mortgage-backed securities, said the U.S. Justice Department was engaged in a “fishing expedition” aimed at collecting massive amounts of data on almost 200 clients. Clayton didn’t identify the 16 institutions being probed by the RMBS working group, a group of federal and state officials that includes the Justice Department.
“Rather than seek documents for those clients who are actually the subjects of its investigation, the government is seeking to seize every document and communication for all 193 clients and for almost 5,000 e-mail custodians, in violation of Clayton’s rights under the Fourth Amendment,” Marc Rothenberg, a lawyer for Clayton at Blank Rome LLP, said in the filing today in federal court in Connecticut.
Other firms received identical subpoenas, Clayton said in its court filing: LPS Credit Risk Solutions and LPS Valuation Solutions. Both are part of Lender Processing Services (LPS).