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Eric Schneiderman, the state’s attorney general,
said some of these banks were involved in the same kind of
wrongdoing that has led him since 2012 to join the federal
government in multi-billion-dollar cases against JPMorgan Chase
& Co, Bank of America Corp and Citigroup Inc, the three-largest
U.S. banks.
“Obviously there were many more institutions involved,”
Schneiderman said in an interview this week. “So there will be
more cases.”
Schneiderman co-chairs a working group on mortgage-backed
securities that U.S. President Barack Obama created in 2012 to
ensure accountability for the financial crisis.
The attorney general said that group remains “very active,”
while declining to discuss whether he is in settlement talks
with Morgan Stanley, the bank that sources say is next in line
for a settlement. A spokesman for Morgan Stanley also declined
to comment.
He did welcome a decision last month by a state judge, Supreme
Court Justice Marcy Friedman, rejecting Credit Suisse Group AG's
bid to dismiss his lawsuit accusing the Swiss bank of deceiving
investors about the safety of mortgage securities that have
suffered $11.2 billion of losses.
Schneiderman said the decision affirmed his power to pursue
fraud cases under the state's Martin Act, a powerful law his
office has wielded against Wall Street for more than a decade.
"It is a very clear statement of the law and the scope of our
reach," the attorney general said.
Schneiderman said he is also confident about the Martin Act case
he filed against Barclays Plc last June, in which he accused the
British bank of offering unfair advantages to high-frequency
traders in its alternative trading system, or dark pool, while
claiming to look out for less-favored clients.
At a hearing last month, state Supreme Court Justice Shirley
Kornreich called the complaint "confusing" and "conflated,"
though she has yet to rule on Barclays' motion to dismiss it.
"This is a tremendously strong case," Schneiderman maintained in
the interview. "It's not hard to figure out this was really
egregious conduct."
He declined to say whether he would pursue other cases over dark
pools, but said "we expect to be active in this area."
Schneiderman said he is looking forward to a Feb. 24 civil trial
in a nearly decade-old case over whether former American
International Group Inc Chairman Maurice "Hank" Greenberg was
responsible for accounting fraud at the insurer.
(Reporting By Karen Freifeld; additional reporting by Aruna
Viswanatha in Washington and Jonathan Stempel in New York;
editing by Andrew Hay)
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