More U.S. prosecutions tied to financial meltdown coming
U.S. Attorney General says 'complicated' investigations will bear fruit
U.S. Attorney General Eric Holder has hinted that the Justice Department plans to launch a number of new legal cases against large financial firms stemming from their actions during the 2008 financial meltdown.
In an interview with the Wall Street Journal, Holder said the department soon will reach decisions on whether to prosecute in a number of probes into bank practices.
The announcement comes as Americans express dissatisfaction over the National Mortgage Settlement worked out by President Barack Obama as compensation for U.S. banks’ role in the mortgage crisis. The $25 billion US paid by the banks was meant, in part, to compensate homeowners for wrongful foreclosures, but any individual family will get less than $2,000 each.
The Obama administration also has faced criticism for not bringing criminal charges against any senior executives over the 2008 market meltdown.
Holder declined to discuss specific cases or say whether the department plans civil or criminal prosecution. But he said he expects to announce new cases himself, which could mean by the end of the year when he plans to step down from office.
"My message is, anybody who's inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time. If any individual or if any institution is banking on waiting things out, they have to think again," Holder said.
Holder says cases involving wrongdoing by financial institutions are complicated but that he has ordered his prosecutors to be "aggressive."
There is a five-year statute of limitations on many white-collar crimes and any criminal cases would have to begin soon to beat that deadline.
It is known that federal investigators are still probing possible abuses in the mortgage-backed securities industry.
Earlier this year, the Justice Department sued Standard & Poor's Ratings Services and parent McGraw Hill Financial Inc. over mortgage-bond ratings, saying the firm misled investors.
And J.P. Morgan, a bank that has faced a series of cases involving its traders over the past six months, is known to be the subject of several government investigations.
"These are complex cases that require enormous amounts of effort to put together, but we are at a point — as you've seen, I think, recently — where the results of that difficult work is starting to bear fruit," Holder told the Wall Street Journal.