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http://www.reuters.com/article/newsOne/idUSN0433728120080505?sp=trueNEW YORK (Reuters) - Prosecutors in the Eastern District of New York in Brooklyn are stepping up their scrutiny of players in the subprime-mortgage crisis, focusing on Wall Street firms and mortgage lenders, the Wall Street Journal said on its Web site on Sunday.
A task force of federal, state and local agencies will look into potential crimes ranging from mortgage fraud by brokers to securities fraud, insider trading and accounting fraud, the Journal said.
The Federal Bureau of Investigation is already targeting major corporate insiders and criminal groups in its investigation of fraud in the mortgage lending industry. The FBI has said it is investigating 19 companies in mortgage cases.
The formation of the task force amplifies efforts already under way in Brooklyn, where prosecutors are investigating whether investment bank UBS AG (UBSN.VX: Quote, Profile, Research) improperly valued its mortgage-securities holdings, the report said.
Also being investigated are the circumstances surrounding the failure of two hedge funds at Bear Stearns Cos (BSC.N: Quote, Profile, Research), which collapsed last summer because of losses tied to mortgage-backed securities, the report said.
Separately, the New York Times said the FBI and the criminal division of the Internal Revenue Service had formed a task force to examine mortgages that were made with little or no proof of the earnings or assets of borrowers.
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