To date, the financial crisis has resulted in high-profile “perp walks” in just two cases: the two Bear Stearns hedge fund managers charged with securities fraud, and the two Credit Suisse brokers also charged with securities fraud in selling ARS. That is about to change, top law enforcement officials told Fox Business News.
A DOJ official tells Fox Business News that 2009 will be a “bonanza year” for arrests. David Cardona, head of the FBI’s criminal division in New York City, stated that the FBI is “looking at all market participants from top to bottom who helped construct” potentially fraudulent loans and asset-backed securities, wherever the evidence leads the agents. Cardona leads 400 agents who handle criminal cases.
Fox reports that the FBI has already launched 26 investigations into major Wall Street firms and investment banks, including Bear Stearns, Credit Suisse, Fannie Mae, Freddie Mac, Lehman Brothers, and American International Group. The mortgage loan fraud caseload alone is about 1,700 cases, with the SEC also pursuing more than 50 pending civil investigations in the subprime area.