Obama Creates Financial Fraud Task ForceGroup Headed by DOJ, Includes Banking Regulatory Agencies
This move comes after a rise in mortgage scams and several high-profile Wall Street trading scandals, including the Madoff ponzi scheme, where thousands of investors lost more than $50 billion.
The order directs the task force, made up of officials from a broad range of agencies, to investigate and prosecute financial crimes connected to the past year's financial crisis and to deter future crimes from occurring. The task force will be chaired by Eric Holder, Attorney General of the Department of Justice, and will include as participants more than 20 federal departments and agencies, including all of the major bank regulatory agencies.
Holder stated during the press conference that the task force is designed to strengthen collective efforts in conjunction with federal, state, and local law enforcement to investigate and prosecute significant financial crimes relating to the current financial crisis. The task force will recover ill-gotten gains, and ensure just and effective punishment for those who perpetrate financial crimes, Holder said.
The task force will be convened for its first meeting within 30 days of today's order, and subsequently will meet as deemed appropriate.
Holder says the nation faces unprecedented challenges in responding to the financial crisis that has gripped the economy for the past year. Mortgage, securities and corporate fraud schemes have eroded the public's confidence in the nation's financial markets and have led to a growing sentiment that Wall Street does not play by the same rules as Main Street. "Unscrupulous executives, Ponzi scheme operators and common criminals alike have targeted the pocketbooks and retirement accounts of middle class Americans, and in many cases, devastated entire families' futures," Holder said.
He stressed that the time for action is at hand. "We will not allow these actions to go unpunished, which is why President Obama has established this Financial Fraud Enforcement Task Force to investigate and prosecute fraud and financial crime."
The announcement of the task force formation was met with support from Vermont Senator Patrick Leahy, who commented, "We can make no greater investment in the financial security and stability of our country than by allocating the necessary resources to root out and prosecute fraud."
The Bush administration formed a corporate fraud task force after the Enron scandal and others. Enron Corp. was the Houston-based giant energy trader that went bankrupt and destroyed the lives of thousands of investors, many of whom worked at the company.