By Karen Freifeld
NEW YORK, Oct 16 (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
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
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
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