Federal prosecutions for serious financial crime plummeted as the nation headed toward one of the worst economic meltdowns in history, USA Today reports. The drop in enforcement touched everything from stock-trading schemes and corporate wrongdoing to fraud aimed at individual consumers. From the fiscal years 2003 to 2009, the number of federal corporate fraud cases dropped 55 perecent; securities fraud charges dropped 17 percent; and bankruptcy fraud cases fell by 44 percent.
Justice Department officials have promised to reverse that trend. While the number of new cases has increased slightly in recent months, it remains a small fraction of what it was a few years ago. The drop in enforcement came as the Bush administration pushed the FBI and federal prosecutors to focus on terrorism and national security, said Ellen Podgor, a Stetson University law professor. Better enforcement might have deterred some of the worst abuses, said Bill McLucas, ex-enforcement chief for the Securities and Exchange Commission. It would not have prevented the financial collapse; “it’s a myth that there are five or 10 people who are responsible for all this,” he said.