Friday, December 26, 2008

Study Shows Drop In Securities Fraud Prosecutions

The New York Times published an article Tuesday describing the drop in federal stock fraud prosecutions based on data from an analysis done at Syracuse University. According to the article, there were 133 prosecutions for securities fraud in the first 11 months of 2008, down from 437 cases in 2000 and from a high of 513 cases in 2002. Further, SEC prosecutions for securities fraud dropped from 69 in 2000 to 9 in 2007. Meanwhile, the article states that civil and adminstrative actions brought by the SEC have increase from 503 in 2000 to 636 in 2008.

Is this really a case of the SEC and DOJ having a policy to be more lenient on securities fraud? Or are there other factors, such as possibly fewer cases resulting from stricter regulations, i.e. Sarbanes Oxley and the excesses of the tech bubble of the late 90s?

Read the story here.

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