NEW YORK, May 17 (UPI) -- New York state is reviewing bank practices involving mortgages bundled into securities, sources close to the investigation told The Wall Street Journal.
New York Attorney General Eric Schneiderman has targeted at least three major banks for the investigation, including Bank of America Corp., Morgan Stanley and Goldman Sachs, and is expected to meet with bank officials soon to discuss bundled loans that were sold to investors and were a major catalyst to the financial meltdown of 2008.
Spokesmen for the banks turned down offers to comment, the Journal reported Tuesday.
It is likely Schneiderman will use the Martin Act of 1921 to challenge banks on their securities practices, as it does not require the state prove an intent to commit fraud.
Short of having to prove intent, the Martin Act only requires prosecutors prove market manipulation or misleading statements were made.
Schneiderman is also investigating firms that profited from the sharp rise in foreclosures since the economic downturn began, the Journal said.
