The Obama administration has formed a new task force to tackle financial fraud after an increase in mortgage scams and Wall Street trading scandals. President Obama has signed an executive order directing a Justice Department task force to investigate and prosecute financial offenses stemming from last year’s financial crisis in an attempt to bring offenders to justice and deter further fraud.
This move comes amid a weakened economy, outrage at the enormous bonuses being paid on Wall Street and disgust and disbelief that securities regulators allowed one of the biggest frauds in U.S. history, the $65 billion Ponzi scheme perpetrated by Bernard Madoff, to go undetected. Said U.S. Attorney General Eric Holder, “We will be relentless in our investigation of corporate and financial wrongdoing, and we will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives.”
In answer to its pledge to be more aggressive in fighting financial crime, the administration created the task force, which replaces a similar one established in 2002 by the Bush administration after corporate scandals such as the collapse of energy trader Enron. When asked how this one would differ, Holder noted the “breadth” of the task force, which will coordinate with a wide range of federal agencies as well as state and local law enforcement authorities.
Asked why the task force was not created earlier, Holder responded that “it took a great deal of time to put all the pieces together.” According to former U.S. prosecutor Robert Mintz, “The formation of this new task force is likely more than mere symbolism, but it may take some time before we see any tangible results.” Specialized units at the SEC will focus on derivatives and securities, insider trading and market manipulation and fraud among hedge funds and investment advisers.