At a joint news conference conducted by the SEC and the U.S. Department of Justice, Robert Khuzami, Director of the SEC’s Division of Enforcement - announced the formation of the RMBS Working Group.  Mr. Khuzami will lead the group which comprises members from these 2 government agencies. The job of the SEC and my fellow law enforcement colleagues is to hold accountable those individuals and institutions who, in one way or another misled investors in the sale of Residential Mortgage Backed Securities (RMBS). Khuzami's Choice Words for RMBSs. From the get-go, Khuzami notes that mortgage products were, in many ways, ground zero in the financial crisis.  Individual mortgages were pooled and sliced and diced into sophisticated securities that were a world away from the house, on a street, in a town somewhere in America where a family had realized their dream - the dream of buying a house they could call a home. A few invested directly in these sophisticated securitized mortgage products, referred to as RMBSs, while many more had exposure to the performance of these investments, even if they didn't own them directly, or had the performance of their other investments tied to these products. Regardless of how they were connected to these products, many shared the belief that these investments were safe and secure, the right investment to protect their financial security, fund their retirement, and pay for their kids' education. That turned out to be terribly wrong. These mortgage products suffered unprecedented losses, and the pain and loss that followed is known all too well.

The job of the SEC and my fellow law enforcement colleagues is to hold accountable those persons, those institutions who lied, who cheated and who misled investors in the sale of these products.

The RMBS Working Group. Members of the Working Group deal with different jurisdictions and bring to the table different expertise.  Yet, they'll all have the common bond of a drive to do whatever it takes to make sure that they've left no stone unturned, no dark corner unexposed to the light.  [C-I Note:  And, it's quite possible, the Group will not take prisoners.]   And, in actions taken by the Commission, some 45 CEOs, CFOs and other senior corporate officers have been named in investigations regarding these products. The SEC’s expertise and experience in mortgage products will be greatly enhanced by our participation in the RMBS Working Group, which presumably will include participants from law enforcement agencies, including:  Department of Justice, FBI, U.S. Attorney Offices, State Attorney’s General, and other authorities from around the country.  Many of us are on the phone with each other weekly, if not daily, moving our investigations forward. Through the leadership of the Financial Fraud Enforcement Task Force, which the the Working Group has co-chaired since its creation in November 2009, ties have been strengthened through the sharing knowledge and leveraging skills and resources in a way that helps all of us to hold violators accountable. Scores of subpoenas have been issued, and group has analyzed more than approximately 25 million pages of documents, dozens and dozens of witnesses, and worked with our industry experts to analyze the terms of these deals and the accuracy of the disclosures For further details:  [SEC Speech-Khuzami, 1/27/12].