Financial Regulatory Forum

U.S. using subpoenas under 1989 act as new tool to probe financial firms

By Andrew W. Schilling, Compliance Complete contributing author

The U.S. Department of Justice has increased its use of the Financial Institutions Reform, Recovery, and Enforcement Act(FIRREA) to prosecute wrong-doing by financial firms. Accordingly, more institutions may find themselves having to deal with a subpoena under the act, including those that are directly targeted under the act. In-house counsel would be well advised to familiarize themselves with the statute and to respond to such subpoenas cautiously.

Responding to subpoenas has become routine business for in-house counsel at financial institutions, whose records are often necessary to “follow the money” in fraud prosecutions and civil lawsuits. (more…)

Barclays may have “early bird discount” in Libor cases

By Stuart Gittleman

NEW YORK/LONDON, June 28 (Thomson Reuters Accelus) - The $453 million settlement Wednesday between Barclays and UK and U.S. officials over the manipulation of a global interest-rate setting formula may be the first in a series of big-money settlements, and those who strike a deal later may face steeper terms.

“I think additional settlements with the other [banks potentially involved in the conduct] are likely,” said Peter Henning, a former U.S. federal prosecutor and enforcement lawyer with the Securities and Exchange Commission who teaches law at Wayne State University in Detroit. (more…)

U.S. Justice Department unit to ramp up hiring as mortgage probes advance

By Emmanuel Olaoye

NEW YORK, March 6 (Thomson Reuters Accelus) - The U.S. Justice Department plans to step up its hiring of staff to investigate abuses in the packaging of residential mortgage backed securities and to work with regulators to uncover serious fraud, a senior department official told Thomson Reuters in the wake of criticisms that Obama administration efforts were insufficient.

Last week, the former chairman of the Financial Crisis Inquiry Commission claimed that the government was not doing enough to uncover serious fraud. In a New York Times opinion piece, Phil Angelides said the 55 attorneys, agents and analysts assigned to the administration’s new mortgage packaging Working Group were not enough to uncover serious fraud. Angelides also criticized the absence of federal regulators in the Working Group.  (more…)

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