First the feds were looking at the the swath of mortgage-backed securities among Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal National Mortgage Association (Fannie Mae), and the Government National Mortgage Association (Ginnie Mae) (collectively, "MBS"). If you just go by the reports in the press and the swirling rumors on the Street, a lot of banks are nervous: Ally Financial, Citigroup, JPMorgan Chase, Wells Fargo, Bank of America, Deutsche Bank, to name only a few of the big boys whose names are bandied about. Perhaps the piper is coming to be paid? Perhaps the roosters of the 90′s mortgage-backed securities days are comin' home to roost?
Now, word is that the investigations are starting to focus and begin honing in on the Residential Mortgage-Backed Securities ("RMBS") market. On May 24, 2012, the United States Department of Justice issued a press release: Residential Mortgage-Backed Securities (RMBS) Working Group Announces New Resources to Investigate RMBS Misconduct announcing the formation of The Residential Mortgage-Backed Securities (RMBS) Working Group and a website dedicated to facilitating the reporting of RMBS fraud athttp://www.stopfraud.gov//rmbs.html.
The working group will focus on:
- investigating potential false or misleading statements,
- deception or other misconduct by market participants in the creation, and
- packaging and sale of mortgage-backed securities.
The working group will hold a two-day meeting at the Washington, D.C., headquarters of the SEC from May 31 to June 1, 2012. Over 180 attorneys, agents, investigators and analysts are expected to attend in person and via video feed this third full group meeting.
The new RMBS fraud website is particularly seeking to hear from industry insiders who witnessed misconduct. Pointedly, the site notes that;
You may be eligible for a substantial reward
Substantial financial rewards may be available if you provide specific information that leads to a monetary recovery by the government. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the reward can amount to 10-30% of the government's monetary recovery. For more detailed information, visit the SEC Office of the Whistleblower
. Rewards also may be available in some circumstances under other statutes, such as the False Claims Act or the Financial Institutions Anti-Fraud Enforcement Act, which allow whistleblowers to report fraud to the United States Attorney General.
. . .
If you witnessed or have evidence of false or misleading statements, deception, or other misconduct by market participants such as loan originators, sponsors, underwriters, trustees, and others in the creation, packaging, and sale of RMBS, please report such information. The SEC can collect tips through its online, easy-to-fill-out questionnaire that collects information about tips, complaints and referrals, including complaints by whistleblowers. To find out how to report to the SEC, click the link below.
Bill Singer's Disclosure
I have been approached by several Whistleblowers in connection with various alleged frauds involving RMBS and attendant areas. Recently, I have been involved in generating a number of matters, which I believe have been submitted to the SEC for investigation.