Attorney General Eric Holder (AP Photo/Susan Walsh)

The Justice Department has launched criminal fraud investigations of individuals at Wall Street firms, with the hopes of filing formal charges in the coming months, Attorney General Eric H. Holder Jr. said Wednesday.

“We are making good progress in these cases, which involve conduct that has undermined the integrity of our markets,” Holder said at New York University Law School.

The nation’s top prosecutor did not go into detail about the inquiries, but people familiar with the cases say the probes involve the possible manipulation of the $5.3 trillion global foreign-exchange markets.

At least seven banks, including JPMorgan Chase, Citigroup and Barclays, disclosed in regulatory filings last year that “various government authorities” had requested information about their trading activities. Bank employees have turned over information to U.S. authorities about the trading scheme, according to people who were not authorized to speak publicly about the ongoing investigations.

A British regulator, the Financial Conduct Authority, initiated the investigation into whether traders at various banks conspired to rig exchange rates to maximize profit and minimize losses. The probe mirrors the ongoing investigation into the manipulation of the London interbank offered rate, or Libor.

“When it comes to financial fraud, the department recognizes the inherent value of bringing enforcement actions against individuals, as opposed to simply the companies that employ them,” Holder said. “Despite the growing jurisprudence that seeks to equate corporations with people, corporate misconduct must necessarily be committed by flesh-and-blood human beings.”

The attorney general has faced unrelenting criticism for failing to bring criminal charges against any Wall Street executives in the wake of the economic meltdown. Even after the Justice Department secured multibillion-dollar settlements with JPMorgan, Citigroup and Bank of America for their role in selling faulty mortgage securities, lawmakers and financial reform advocates have questioned why individuals behind such schemes have never been charged.

Yet late last month, Bloomberg reported that the U.S. attorney’s office in Los Angeles is preparing to file a civil suit against a key figure in the housing meltdown, Angelo Mozilo. The former head of Countrywide Financial, once one of the largest mortgage originators in the country, has been accused of making high-interest, sub-prime loans to homebuyers, which contributed to the housing crisis.

Critics have accused Holder of handling Wall Street with kid gloves, a critique he fueled a year ago by telling lawmakers that some financial firms had become so large that it was difficult to prosecute them because of the potential impact on the economy. Since then, Holder has tempered that argument by stressing the need for prosecutors to work with regulators to hold institutions accountable without wrecking their entire business.

In a nod to the criticism, Holder said on Wednesday that he understands and shares the public’s frustration over the dearth of top executives being held accountable for misconduct committed at their firms. Yet in some instances, he said, it is impossible to prove a high-ranking executive who is far removed from the day-to-day operations had any knowledge of any number of misdeeds.

“In an age when corporations are structured to blur lines of authority and prevent responsibility for individual business decisions from residing with a single person, we ought to consider whether the law provides an adequate means to hold the decision-makers at these firms properly accountable,” Holder said.

Federal prosecutors, he said, need sufficient evidence of intent, proof that has often come from cooperating witnesses or whistleblowers. The False Claims Act encourages witnesses to come forward in cases where the government has been defrauded by providing them up to a third of the proceeds recovered by authorities, but the law only extends to government-funded programs.

Justice has used a powerful 1980s-era law known as the Financial Institutions Reform, Recovery and Enforcement Act, commonly called FIRREA, to reward witnesses who come forward with evidence in financial fraud cases. Awards under the law, however, are capped at $1.6 million, which Holder called “a paltry sum in an industry in which, last year, the collective bonus pool rose above $26 billion, and median executive pay was $15 million and rising.”

Holder would like Congress to update the whistleblower provision in FIRREA to increase incentives for witness cooperation, a move he said could “significantly improve the Justice Department’s ability to gather evidence of wrongdoing while complex financial crimes are still in progress.”

The Securities and Exchange Commission offers whistleblowers up to 30 percent of recovered proceeds in civil cases through a program established by the 2010 Dodd-Frank financial reform law. The agency awarded more than $14 million to one whistleblower last year for handing over information that led to an enforcement action.

“There needs to be some parity between the Department of Justice and the SEC,” said Columbia University law professor John Coffee. “You would assume that the criminal cases that Justice handles require more evidence, involve more culpability, so you need even more than 20 percent as an incentive.”

Eugene Goldman, a former SEC enforcment lawyer, said any proposal to expand bounty payments to whistleblowers would take years of review, hearings and an assessment of whether the SEC program has been effective.

“Built-in deterrents against false and reckless accusations will need to be considered, given the temptation to seek awards beyond the current caps,” said Goldman, now a partner at McDermott Will & Emery law firm.