Bill Aims To Beef Up Prosecution Of Wall Street Fraud

Bill Aims To Beef Up Prosecution Of Wall Street Fraud - 1/22/2009

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Bill Aims To Beef Up Prosecution Of Wall Street Fraud
Jacqueline Bell

Securities Law 360. January 22, 2009
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EXCERPT: A bill proposed Thursday aims to help law enforcement crack down on white collar crime by bolstering the resources available to regulators. The Supplemental Anti-Fraud Enforcement Markets Act, introduced Thursday by Sen. Charles Schumer, D-N.Y., and Sen. Richard Shelby, R-Ala., would dedicate an additional $110 million annually for the country's top law enforcement agencies to hire hundreds of new investigators and prosecutors for their financial fraud units. The $110 million would allow for the hiring of 500 new FBI agents, 50 new assistant U.S. attorneys and 100 new SEC enforcement division employees. “Our white collar crime divisions are understaffed, underfunded and overwhelmed,” Schumer said. “When a wave of violent crime sweeps through a city, the immediate response is to beef up the police forces, putting more cops on the beat, extending overtime and making sure the city returns to safety. Our reaction to the financial crisis and the massive and complex financial fraud investigations that loom should be no different,” Schumer added. The agencies that oversee Wall Street don't have the resources they need to handle the rise of securities and accounting fraud cases in the wake of the financial crisis, the senators said in a statement Thursday. White-collar crime units at law enforcement agencies have shrunk in recent years as resources have been shifted to counterterrorism efforts, the senators said, and the Bush administration never replaced the agents who were transferred. Many U.S. attorneys' offices have also had their budgets frozen, and there have not been enough new hires to sufficiently prosecute frauds against financial institutions, the senators argue. […] The senators said a $110 million investment in enforcement would essentially pay for itself, since fines and restitution paid as a result of prosecuting additional cases could well far exceed $110 million.

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