Administration Announces Financial Fraud Unit
Corporations and individuals doing business in financial marketplaces willrnbe subject to increased scrutiny by a new task force on financial fraudrnannounced on Tuesday.
Attorney General Eric Holder revealed creation of the interagency group torncrack down on financial fraud at a press conference on Tuesday. The task force has been charged withrninvestigating and prosecuting financial crimes connected to the recentrnfinancial crisis and with taking steps to stop fraud on an ongoing basis. Therninitiative was created under an executive order signed by President BarackrnObama.
Holder stated, “The Task Force is designed to strengthen our collectivernefforts — in conjunction with our federal, state, and local partners — torninvestigate and prosecute significant financial crimes relating to the currentrnfinancial crisis; to recover ill-gotten gains; and to ensure just and effectivernpunishment for those who perpetrate financial crimes.
“We face unprecedented challenges in responding to the financial crisis thatrnhas gripped our economy for the past year. Mortgage, securities, and corporaternfraud schemes have eroded the public's confidence in the nation's financialrnmarkets and have led to a growing sentiment that Wall Street does not play byrnthe same rules as Main Street. Unscrupulous executives, Ponzi scheme operators,rnand common criminals alike have targeted the pocketbooks and retirementrnaccounts of middle class Americans, and in many cases, devastated entirernfamilies' futures.”
Holder said that the task force will go beyond holding accountable those involvedrnin the mortgage and credit crises but will work to prevent another meltdownrnfrom happening. He said the administration wants to send a message to anyonernlooking to profit by harming others that, “We will investigate you, we willrnprosecute you, and we will incarcerate you.”
The task force will be chaired by AG Holder and will include representativesrnof the Departments of Justice, Housing and Urban Development and the Securitiesrnand Exchange Commission.
Creating the task force or taking some other similar action was virtually arnnecessity for the administration in the face of growing public anger over therntypes of financial malfeasance alluded to by Holder in his statement. The public has been increasingly outspoken inrnits anger about such scandals as the one in which Bernie Madoff bilked thousandsrnof people out of billions of dollars. Hernoperated virtually unchecked for many years while those who were supposed to bernregulating his operations were oblivious to obvious signs of his criminalrnactivity. Madoff, at least, is in prison, serving a 150 year sentence. What have provoked even more public outragernhas been the seemingly bullet-proof executives of banks and mortgage companies whornhave taken cost the taxpayers billions while, thus far, escaping any consequencesrnof their reckless or possibly criminal activities.
In reality the government has not been ignoring these situations. The FBI, the Securities and Exchange Commissionrnand many states' attorneys general have been investigating hundreds of differentrnpossible financial crimes. Holderrnreferenced these investigations during the press conference and said he expectsrnmany prosecutions will be announced.
Also speaking at the press conference was Treasury Secretary Tim Geithnerrnwho stressed the necessity not only to prosecute crimes that have happened, butrnto spot and stop new trends in financial activity and products with thernpotential to negatively impact individuals and the economy as a whole.
“We can't wait for problems to peak before we respond,” Geithnerrnsaid in a statement. “We're seeking a comprehensive financial reform torncreate a more stable, safe financial system and stepping up our enforcementrnstrategy.”
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