SEC Probes Dozens of Subprime Lenders

Securities and Exchange Commission Chairman Christopher Cox said Thursday that the agency has more than three dozen subprime cases underway to determine who might be blameworthy, as regulators press to root out the causes of the mortgage mess.

Details of the investigations are confidential, Cox said at a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, because it still is unclear whether any securities laws were broken.

"The investigations involve several areas of potential violations of the securities laws, including securitization issues by underwriters and other firms involved in the process of bringing subprime securities to market, as well as disclosures, valuations, and sales to investors," Cox said.

The SEC is not alone in trying to crackdown on possible fraud relating to the subprime mortgage industry. The FBI said Thursday that it opened two more investigations into corporations involved in subprime lending, bringing the total number of probes to 14. According to the Washington Post , the SEC and the FBI have been working closely together in their investigations. The SEC has already hired 100 lawyers as part of its subprime mortgage working group.

Litigation surrounding the subprime crisis has been on the rise, as well. According to the D&O Diary website , which tracks such cases, 35 lawsuits have been filed against subprime lenders since the beginning of 2007.