Monday, March 19, 2012

Attorney General Defends Efforts to Combat Financial Fraud

In a recent speech at Columbia University, Attorney General Eric Holder Jr. touted the work of the Justice Department in its pursuit Wall Street criminals. While the Justice Department has been under intense criticism for its failure to pursue wrongdoers that perpetuated the 2008 financial crisis, Holder’s comments come on the heels of President Obama’s announcement during his State of the Union Address in January that the government is committed to bringing justice to Wall Street through a newly created task force. Holder opined at Columbia that the Justice Department struggles to arrest Wall Street wrongdoers because on its face, executives’ conduct has been unethical and reckless, just not criminal. According to the New York Times DealBook Holder said: “We found that much of the conduct that led to the financial crisis was unethical and irresponsible,” said Mr. Holder, who earned his undergraduate and law degrees at Columbia. “But we have also discovered that some of this behavior — while morally reprehensible — may not necessarily have been criminal.” That said, Holder assured that he “will not hesitate to bring prosecutions” when criminal wrongdoing is evident.

While Justice has had some recent setbacks, the Department’s task force has issued civil subpoenas to eleven financial companies that it claimed played a role in the housing crisis. Holder assured that, with several investigations ongoing, to expect more subpoenas to follow.

1 comment:

  1. I find it hard to understand how the Attorney General and the Justice Department claim that they have been unable to find a criminal aspect in the high risk, mortgage backed securities that led to the financial meltdown. This "unethical" and "morally reprehensible" behavior certainly seems criminal in that the executives responsible go untouched while thousands lost homes and money based upon this kind of behavior. I understand that the Justice Department must show that there is a nexus between the behavior and breaking the law, but it seems that the Justice Department may be too ready to settle and drop charges instead of thinking of new ways to put these executives behind bars.

    Hopefully, this new task force will be instrumental in finally bringing these people to justice. The task force is supposed to bring together state and federal government to increase efforts in investigating and criminalizing this risky behavior. It will be interesting to see, in the coming months, whether or not this task force will be able to make that nexus in order to finally punish those responsible for the meltdown.

    Caitlin Bailey