Meltdown

SEC Brings Few Cases

Raises concerns about lax enforcement.

Federal prosecutors are feeling generous this holiday. At a time when fraud in the stock market is on everyone's mind, reports the New York Times, the feds are on pace to bring the fewest prosecutions for securities fraud since 1991. The research, by a group at Syracuse University, shows only 133 cases of fraud were brought through November of this year, a 70% decline in activity since 2001. “I think the SEC has completely fallen down on the job,” said Jacob H. Zamansky, a New York lawyer who specializes in representing investors who have lost money in fraud cases. “They’re more interested in protecting Wall Street than protecting investors. The new administration has to do a complete overhaul of the SEC” Part of the problem is a shift in FBI priorities after 9/11 from financial crimes towards terrorism. At the SEC, however, critics point towards a "revolving door" that saw agents leave their posts as watchdogs to take high paid positions in the industry they were supposed to protect.