Obama Target: Financial Fraud

President Obama’s State of the Union address was a Populist speech that sets the stage for more financial fraud prosecutions this year, and for years to come. U.S. Attorneys, the SEC, the CFTC, and other federal agencies no doubt have received their marching orders from their boss: attack financial fraud. 

This is what the President had to say in his State of the Union talk about financial fraud:
 
“We’ll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments.  Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender.  That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing.  So pass legislation that makes the penalties for fraud count. 
 
“And tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

Whether Congress increases penalties or not, the President is making it clear that the Executive Branch will be attacking financial fraud even more than it has over the past three years.