Tuesday, January 24, 2012

Financial Crimes Unit

President Obama's State of the Union Address spoke to many important issues.  One was financial crime.  He said "[w]e will also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people's investments." (see full text Wash Po here).  He later states, "[s]o pass legislation that makes the penalties for fraud count."

Some may recall that back in 2009 President Obama created the Financial Fraud Enforcement Task Force that had as its purpose "to hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery." (see here)  I am a bit uncertain how this existing body will or will not interact with the new Financial Crimes Unit, but the concept of further enforcement in this area sounds impressive.  Perhaps more funding will be supplied to the SEC through this initiative so that they can properly regulate improprieties and avoid Ponzi schemes of the past.  Perhaps more FBI investigators will be hired to work on building these cases. I applaud the President for this one - especially if he goes in this direction.

On the other hand, we really do not need new legislation to make "the penalties of fraud count."  The legislation is there, and if one looks at the website of the Financial Fraud Enforcement Task Force, there have been a significant amount of prosecutions with existing statutes. (see here). The statutes are there -it is the money that is needed to make these difficult and often complex cases.  Please don't add more to the already approximately 4,500 federal statutes out there. 

So more regulatory oversight, more prosecutors and SEC folks working on financial matters will help.  But the legislation and penalties are already there.  I look forward to seeing this Financial Crime Unit up and running and cracking down on improprieties in our financial world. 



Investigations, Prosecutions, Prosecutors | Permalink

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