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Federal Investigators Ramp Up Scrutiny of Subprime Meltdown

For the past year, the SEC has steadily ramped up its scrutiny of the subprime meltdown.  In March 2007, the SECs Enforcement Director stated that the agency planned to focus on all the actors and their roles in the subprime realm. That same month, the SECs Chairman informed Congress that the SEC created a subprime working group to investigate possible fraud involving subprime mortgage lending. This task force rapidly grew from 25 to more than 100 lawyers over the past year, and reportedly has approximately three dozen active investigations of subprime players (including issuers, underwriters, credit-rating agencies, insurance companies, and broker-dealers).

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