WASHINGTON (Reuters) - The FBI's investigation of 14
corporations in a crackdown on improper subprime lending could
expand to other companies, but the complex probes may take some
time before any charges are brought, a federal law enforcement
official said on Wednesday.
"Like any white-collar crime investigation, these are very
complicated, time-consuming investigations involving the
examination of numerous records and interviews of various
people. They don't happen in a short period of time," the FBI
official said.
The official said criminal charges were not imminent in any
of the investigations, and was unable to predict how long the
investigations would take. A Justice Department spokesman
declined to comment when asked when charges might be announced.
FBI officials told a briefing on Tuesday the investigations
covered corporations across the financial services industry,
ranging from mortgage lenders and investment banks to
developers and subprime lenders.
They said the investigations involved possible accounting
fraud, insider trading and other violations of criminal law.
FBI spokesman Bill Carter said on Wednesday that the first
investigations began early last year, that two more
investigations recently were opened, and that more companies
could be probed.
Carter declined to identify any of the companies under
investigation. He said the FBI was working closely with the
Securities and Exchange Commission in some of the
investigations.
FOCUS ON PRICING, INVESTORS
The SEC has opened about three dozen civil investigations
into the subprime market collapse.
Targets of the SEC probe include Swiss bank UBS AG
and U.S investment banks Morgan Stanley,
Merrill Lynch, Bear Stearns, as well as bond
insurer MBIA.
The SEC, which has formed an internal subprime mortgage
task force, is looking at how financial firms priced
mortgage-based securities and whether they should have told
investors earlier about the declining value of those
securities.
Jacob Frenkel, a former SEC enforcement official and
criminal prosecutor who now handles white-collar criminal
matters in private practice, said the investigations would take
time.
"First, the commission is not going to pull the trigger and
bring a case until it is satisfied that there is a provable
violation of law," Frenkel said. "The arrival on the scene of
the Department of Justice could alter the timetable."
The U.S. attorney in Brooklyn, New York, and the FBI
earlier launched a criminal investigation into two
mortgage-related hedge funds at Bear Stearns that collapsed
last year.
Carter said the FBI around the country has 34 mortgage
fraud task forces and working groups that include other federal
agencies and state and local law enforcement officials.
"We consider it a significant and growing crime problem,"
he said.
(Additional reporting by Randall Mikkelsen, Karey Wutkowski
and Rachelle Younglai)
(Reporting by James Vicini; Editing by Xavier Briand)
Copyright
Reuters 2007. All rights reserved. Users may download and print extracts of
content from this website for their own personal and non-commercial use only.
Republication or redistribution of Reuters content, including by framing or
similar means, is expressly prohibited without the prior written consent of
Reuters. Reuters and the Reuters sphere logo are registered trademarks or
trademarks of the Reuters group of companies around the world.
Government 
