NY attorney general names new investor-protection chief
NEW YORK (Reuters) - New York Attorney General Eric Schneiderman on Wednesday named a new chief for his office's Investor Protection Bureau, which is probing abuses by Wall Street banks in the sale of mortgage-backed securities before the financial crisis.
Chad Johnson, 46, a veteran securities lawyer who joined the attorney general's office last year, replaces Marc Minor, who resigned after holding the position from March 2011 through August.
In recent weeks, Johnson has represented the New York attorney general in negotiations with JPMorgan Chase & Co over government mortgage probes, according to a person familiar with those negotiations who is not authorized to speak publicly about the matter.
The discussions also include the U.S. Department of Justice, Securities and Exchange Commission and Department of Housing and Urban Development.
New York's participation stems from Schneiderman's appointment as co-chair of a working group formed by President Barack Obama in January 2012 to investigate misconduct in mortgage securities that contributed to the financial crisis.
Schneiderman brought the 11working group's first lawsuit last October, suing JPMorgan in state court over alleged improper sales of pools of home loans by Bear Stearns in 2006 and 2007.
His Investor Protection Bureau brought a similar lawsuit against Credit Suisse Group AG in November.
In an interview on Wednesday, Johnson declined to comment on the negotiations with JPMorgan.
He said the bureau was continuing to probe the early release of market-moving information. The investigation, which he has been overseeing, includes Thomson Reuters, the parent company of Reuters, and other companies.
"The bureau has a broad mission to look out for the interests of investors," Johnson said. "The attorney general has made clear that, among other things, he is focused on the fact that some companies are involved in the early release of market moving information to a select few."
Schneiderman has said the practice gave an unfair advantage to high-speed traders who execute huge volumes of trades.
While the probe continues, Thomson Reuters has agreed to stop giving high-frequency traders a two-second jump on University of Michigan consumer data. The company has said it believes the practice was legal and it did nothing wrong.
Johnson said the investigation also includes "efforts to gain early access to analysts' sentiments."
Johnson joined the New York attorney general's office last year as a senior trial counsel and later became a deputy attorney general. He graduated from Harvard Law School and the University of Michigan.
Until 2012, he was a partner at Bernstein Litowitz Berger & Grossman, where he represented both institutional investors and individual shareholders in securities fraud and corporate governance litigation.
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