The new Financial Fraud Enforcement Task Force announced yesterday by Attorney General Eric Holder actually is a broader version of a corporate fraud task force launched in the Bush administration, McClatchy Newspapers report. The new initiative aims for more than two dozen federal agencies to coordinate efforts with state attorneys general and local district attorneys. So far, the task force’s federal agencies will have little additional manpower.
Holder said 2,400 FBI investigations into alleged mortgage fraud already were under way and that about 38 ongoing financial inquiries into major corporations would continue. The announcement came a week after a federal jury in New York acquitted two former Bear Stearns hedge fund managers of fraud charges stemming from the collapse of a $1.6 billion fund tied to risky home mortgages. That left federal prosecutors with no convictions of Wall Street executives since last year’s meltdown, which occurred after big investment banks sold $2 trillion in securities tied to dicey mortgages, fueling a housing bubble that burst.