The working group formed by the Justice Department and several other agencies to investigate residential mortgage-backed securities fraud during the housing boom opened a website for potential whistleblowers.
The Obama administration started the group through a series of press conferences in January. The group headed by New York Attorney General Eric Schneiderman subpoenaed 11 of the largest financial institutions. The amount of subpoenas grew to 25 since, but the group has taken no action, despite promises otherwise in January.
Along with the website for whistleblowers to participate in the investigations for a reward, the group also created a team to coordinate investigations underway across the country. Matthew Stegman, a career prosecutor at the DOJ, will head the new team.
“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,” said Acting Associate Attorney General Tony West. “We want to hear from them.”
The task force will hold a two-day meeting in Washington on May 31 and June 1. It expects more than 180 attorneys, investigators and analysts from participating agencies to attend.
Rep. Maxine Waters, D-Calif., challenged Securities and Exchange Commission Director of Enforcement Robert Khuzami on the progress of the working group during a House hearing last week. He mentioned a new coordinator but said individual groups that make up the task force from different agencies conduct most of the investigative work.
“We want to know what went wrong. We’ve been making a lot of promises,” Waters said at the hearing.”We anxiously await what they are going to be able to accomplish, and we think it’s taking too long for them to get up and going and showing us what they can do.”
Khuzami said in a statement Thursday that more than 40 SEC staffers trained in securitized products were taking part in the investigation, which contains “cross-agency teams comprised of experienced prosecutors and investigators.”