Wall Street take note: Attorney General Eric Holder announced Tuesday that the U.S. Department of Justice (DOJ) will actively pursue more corporate fraud cases in the coming months.
Some have criticized the DOJ’s handling—or non-handling—of companies and individuals involved in the current economic crisis, many of whom have never been tried. Even when the government does pursue corporate fraud cases, companies often escape with relatively light financial penalties and without admitting responsibility. Last November, for instance, U.S. District Judge Jed Rakoff rejected a proposed $285 million settlement between the Securities and Exchange Commission (SEC) and Citigroup, calling the fine “pocket change.”
Holder acknowledged this pattern in his Tuesday remarks. "Especially when you look at the securities field, there have been far too many repeat offenders," he said, according to Thomson Reuters. "It can't simply be that you make billions of dollars and then you pay hundreds of millions of dollars in penalties. That's not a disincentive.”
The Attorney General’s remarks come amid other government moves to combat fraud. In a recently submitted budget proposal, the DOJ asked Congress for additional funding to hire more personnel, including 16 new prosecutors to handle financial fraud cases. Some of these prosecutors may join a new federal-state unit investigating misconduct linked to mortgage-backed securities.
Read more at Reuters.