SEC to Probably Bring More Mortgage-Bond Cases, Muoio SaysJody Shenn
The U.S. Securities and Exchange Commission is likely to continue filing cases tied to residential-mortgage-backed securities, said Reid Muoio, deputy head of its structured and new products unit.
The agency has so far filed approximately 80 enforcement actions involving “wrongdoing generally associated with the financial crisis,” Muoio said today at the American Securitization Forum’s annual conference in Las Vegas. That included settlements last year with Credit Suisse Group AG and JPMorgan Chase & Co. over RMBS, he said.
“There’s probably almost certainly more to come in that space,” he said.
The agency yesterday filed a lawsuit against former Jefferies & Co. mortgage-bond trader Jesse Litvak in federal court in Connecticut, accusing him of defrauding investors in more than 25 trades from 2009 to 2011. Litvak, who also faces criminal charges, denies wrongdoing, according to a statement from Patrick J. Smith, an attorney with DLA Piper in New York who is representing him.
The alleged lying to clients used by Litvak in his trading is probably “fairly commonplace, fairly widespread,” Muoio said. “I’ve been told that today by actually a number of different industry participants.” He said that he couldn’t comment on whether his agency would pursue similar cases.
The SEC is “looking to wrap up our financial crisis-related enforcement efforts this calendar year,” Muoio said