FBI Probing 14 companies in mortgage mess.

[SirNitram]

Link

WASHINGTON (AP) — The Federal Bureau of Investigation on Tuesday said it is investigating 14 companies for possible fraud or insider trading violations in connection with loans made to risky borrowers, and investments spun off of those loans.

Agency officials did not identify the companies under investigation but said the wide-ranging probe, which began in spring 2007, involves companies across the industry, from mortgage lenders to financial firms that bundle home loans into securities sold to investors.

The FBI is working in conjunction with the Securities and Exchange Commission, Neil Power, chief of the FBI's economic crimes unit in Washington, said during a briefing with reporters.

The development comes as authorities in New York and Connecticut investigate whether Wall Street banks hid crucial information about high-risk loans bundled into securities that were sold to investors.

Power said federal authorities are looking into the practices of so-called subprime lenders, as well as potential accounting fraud committed by financial firms that hold subprime loans on their books or securitize them and sell them to other investors.

Referring to certain bankrupt subprime lenders, Power said there are "some irregularities there that we're looking into."

Gosh, you relax oversight and there's fraud? MADNESS.