FBI’s Probe Into Subprime Crisis Widens
The Federal Bureau of Investigation’s ongoing probe into the institutional players connected to the nation’s subprime mortgage crisis has netted 19 companies - and that may be just the tip of the iceberg.
The focus of the 19 criminal probes concerns accounting fraud, insider trading by investment managers and possible deceptive marketing practices. During testimony before Congress on April 16, FBI director Robert Mueller said there was no end in sight to the individual and corporate fraud cases that may materialize, and that the bureau intended to reassign agents from other areas to deal with the surge.
While Mueller didn’t disclose information on the companies named in the FBI investigation, several reports say Countrywide Financial Corp., the country’s largest mortgage lender, is one of those involved for alleged accounting fraud.
Earlier this year, three of Wall Street’s biggest investment firms - Goldman Sachs, Morgan Stanley, and Bear Stearns - confirmed that government investigators had requested information regarding their subprime activities. To date, the FBI has refused to comment on whether any of the three are targeted in its probe.
What the FBI does say is that its investigation into the subprime crisis could take years to officially close. Regardless, the fact that the main investigative arm of the U.S. Department of Justice is involved in the first place underscores the seriousness of what may lie ahead for countless companies across the financial industry.
And for the thousands of investors facing monumental monetary losses as a result of deceptive marketing practices by investment banks or brokers, justice can’t come soon enough.
Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.
