One of the co-chairs of the new federal/state RMBS Working Group is preparing to file cases in the next few weeks against Wall Street firms involved in the packaging and selling of RMBS.
"My office will be bringing cases in the course of the next few weeks that are coordinated with our colleagues," New York attorney general Eric Schneiderman said Sunday.
But Monday morning the AG's office declined to be more specific about the nature of its cases in progress.
Speaking on 'Up with Chris Hayes' on MSNBC, the New York AG noted that he started his investigation into MBS packaging eight months ago.
"We are not going to stop that work" he said, just because of the creation of the joint investigation involving the U.S. Department of Justice, Securities and Exchange Commission (SEC), Consumer Financial Protection Bureau, Internal Revenue Service (IRS) and state AGs.
U.S. Attorney General Eric Holder announced the creation of the RMBS working group Friday, after President Obama unveiled it during his State of the Union address.
Schneiderman said teaming up with the feds leverages his ability to pursue cases where the state's statute of limitations has expired, and tax violations regarding IRS REMIC securitization rules. "The overlay of jurisdiction of these different entities guarantees our ability to inquire into every MBS issued in the last decade," Schneiderman said.
He stressed that the RMBS working group is focused on the MBS securitization business that "blew up the economy" in 2008. The ongoing settlement talks over servicing and foreclosures practices involve "post-crash misconduct" for the robo-signings and other abuses.
"I'm very confident now that whatever releases might be granted in the servicing settlement being negotiated is not going to impede our investigation," Schneiderman said.
In other news about the new group, an SEC official said that the group will seek sales disclosure.
Evidence of insufficient or misleading disclosures during RMBS sales will be a focus of the working group , according to Robert Khuzami, director of the SEC's division of enforcement.
“We are looking for evidence that a firm failed to disclose important information when selling these securities – for example, misleading disclosures about the credit quality, conformity with underwriting guidelines, underlying property valuations, and delinquency and defects of mortgages in the RMBS pools,” said Khuzami in remarks prepared for the group's joint news conference Friday.
“Every failure does not mean that the law was broken, but all of us are committed to identifying the violations that did occur and prosecuting them,” he said.