WASHINGTON — US Attorney General Eric Holder introduced New York Attorney General Eric Schneiderman yesterday to help lead a new federal group investigating mortgage-backed securities abuses that led to the national housing-market collapse.
Schneiderman said the combined state and federal effort will have the jurisdiction it needs to unravel industry misconduct.
“We have the resources,” said Schneiderman, who will be a co-chair of the new unit President Obama unveiled in his State of the Union speech.
The fraud-fighting unit will start with 55 prosecutors and investigators. Holder yesterday said investigators have issued civil subpoenas to 11 financial institutions in the past few days, with more on the way.
Residential mortgage-backed securities are the huge investment packages of what turned out to be near-worthless mortgages that bankrupted many investors and contributed to the nation’s financial crisis.
Schneiderman said info sharing between federal and state investigators will produce more far-reaching results. He said New York state securities law is more flexible than federal securities law, which can make it easier to assemble cases.