One year after President Obama launched a new task force to investigate fraud during the subprimemortgage crisis, a co-chair of the group says a desire is now growing among prosecutors for a more aggressive response to the meltdown.
New York Attorney General Eric Schneiderman says there is little question fraud played a role in the 2008 financial crisis. In October, his office filed the task force’s first case, a civil suit alleging “a systemic fraud on thousands of investors” by JPMorgan Chase between 2005 and 2007.
As FRONTLINE reported in The Untouchables, the case also marked the government’s first major fraud suit against a Wall Street bank for the crisis.
“I think what we’ve expanded and what we have done is to increase the appetite for these broader-platform cases that address systemic patterns of fraud rather than going on a deal-by-deal basis,” Schneiderman told FRONTLINE correspondent Martin Smith. “I think that’s a huge step … And that’s what we are seeking accountability for, and that’s what we’ll continue to pursue.”
Schneiderman said his investigations began with the due diligence firms that banks hired to gauge the quality of loans they were buying and packaging into mortgage-backed securities. “We found in several cases that we brought already — and we have other investigations under way — it was a sham,” he said.
This is the edited transcript of an interview conducted on Dec. 4, 2012:
Read it here…