Thursday, October 9, 2008

More Palmer Raids?

"Federal investigators have opened preliminary probes into the financial troubles of four high-profile companies that are at the center of the current financial turmoil that the Bush adminsitration says requires an unprecedented taxpayer-funded bailout. ... The probe comes as the huge potential tab for the taxpayers in the crisis raises the stakes for the Justice Department. The FBI says it now has 26 companies under investigation, in addition to pursuing more than 1,400 mortgage-fraud cases nationwide. Pressure is building for the FBI and regulators to hold top executives accountable for the crisis that has crippled the nation's finance sector. In meetings on Capitol Hill, some lawmakers have raised concerns with Treasury Secretary Henry Paulson that by taking large stakes in some financial firms, the government may be limiting its ability to exact penalties for wrongdoing, according to people familar with the matter. ... The FBI says that the corporate probes are part of an effort to pursue allegations of higher-level fraud more sweeping than the retail-level infractions that have been at the center of most cases brought so far. ... Brian Roehrkasse [BR], Justice Department spokesman, defended the way the department has responded to the crisis: 'The FBI continues to investigate a number of companies for subprime-lending practices, but the department brings criminal prosecutions based soley on the facts and the law. Where we find evidence of criminal wrongdoing we will prosecute'," Evan Perez at the WSJ, 24 September 2008.

The Paulson plan runs into trouble on Capitol Hill then the DOJ appears to act against "higher-level fraud". Who is the DOJ kidding? "We will prosecute if the AUSA in charge of the matter is not seeking a job with the law firm which represents the corporate wrongdoer", is what I believe BR should have said. "Round up the usual suspects". My previous related posts are:

No comments: