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Sub-prime housing scandal spawns FBI probe

Sub-prime housing scandal spawns FBI probe
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The FBI has opened criminal investigations into improper lending in the US housing market. Officials from 14 companies – including developers and some of the world’s largest banks – are to be questioned over possible accounting fraud.

Investigators are also looking into whether loans were improperly secured and the possibility of insider trading during the sub-prime mortgage scandal. The FBI said it will work with the US Securities and Exchange Commission which has started more than thirty civil investigations.

The authorities want to know if banks hid crucial information about high-risk housing loans that were bundled into securities and sold on to investors.