New Task Force Established to Combat Financial Fraud

Yesterday, the Obama Administration announced the creation of a new task force dedicated to rooting out individuals who participated in fraudulent activities that led to the great financial meltdown of 2008.  The new organization is aptly named the Financial Fraud Enforcement Task Force and is composed of members from over 24 federal agencies.  It will be chaired by Attorney General Eric Holder.  Here is more on the task force from a Securities & Exchange Commission press release.

The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government's law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days.

"This task force's mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening," Attorney General Eric Holder said. "We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives."

While noble in its intent, this new task force faces several challenges.  First, its membership is quite large and politically unwieldy.  Second, it is made up of agencies that were charged with enforcing laws and regulations that were intended to prevent fraudulent activity from occurring in the first place.  Third, its creation falls on the heels of an unsuccessful prosecution of hedge fund managers that brought Bear Stearns to its knees.  Only time will tell if the task force can successfully achieve its mission.