It is estimated that more than $100bn (£50bn) was been wiped off the balance sheets across the financial sector, in losses and asset writedowns. Share prices have also fallen heavily.
The SEC is already conducting a clutch of civil investigations into the scandal.
Some US states have launched their own legal action. Yesterday, Connecticut state attorney general Richard Blumenthal said his office has issued subpoenas to all major rating agencies and bond insurers in a widening probe of industry practices related to the sub-prime mortgage crisis.
He said this includes MBIA and Ambac, the two monoline insurers who guarantee municipal loans whose shares plunged last week over concern they do not hold enough capital to guarantee their ratings, after getting caught in the sub-prime chaos.
Blumenthal also told Reuters that Connecticut was cooperating with the state of New York over its investigation.
Senator Chris Dodd had some words on this:
The House of Representatives overwhelmingly passed a $146 billion economic stimulus package on Tuesday. Parts of the package would allow the Federal Housing Administration and housing finance giants Fannie Mae and Freddie Mac to help prop up the mortgage market.Imagine that? Preznit bush doing nothing to help the little people. How republican of him!
These measures "will enable homeowners with larger mortgages to refinance, lower their monthly payments, and avoid foreclosure," said Rep. George Miller, a California Democrat, after passage of the package.
Sen Christopher Dodd, chairman of the Senate Banking Committee, urged the Senate to take similar action swiftly and spend billions of dollars more to help distressed homeowners.
"Unlike past recessions and slowdowns, the epicenter of this economic crisis is the housing crisis," the Connecticut Democrat said on the Senate floor.
"Reckless, careless, and sometimes unscrupulous actors in the mortgage lending industry essentially allowed loans to be made that they knew hard-working, law-abiding borrowers would not be able to repay," said the former presidential candidate.
He accused the Federal Reserve and the Bush administration of doing "absolutely nothing" to stop these practices.