The President announced a new financial fraud task force focused on the root causes of the financial crisis in his State of the Union Address to Congress. The new task force is composed of DOJ and state prosecutors. It is charged with investigating the securitization process which many believe is at the center of the market crisis. While it is clear that the new task force differs from the one announced by the President in 2009, whether the group will simply reinvestigate areas which have been analyzed by the DOJ and SEC with a view toward bringing criminal actions, or will focus on other issues is unclear.
A new report on SEC enforcement settlements notes that the number of cases resolved in fiscal 2011 is about the same as in fiscal 2010 while the mean settlement value for cases against corporations and individuals increased. A comparable report on securities class actions reports a modest increase in the number of cases brought last year.
Finally, SEC enforcement this week focused on insider trading, financial fraud and account intrusion as well as failure to supervise. The Second Circuit handed down a decision interpreting Exchange Act Section 16(b).
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