Now the acts of austerity that have arisen because of that same recession may ensure that no prosecutions will ever take place; namely, the reduction of funding for agencies that would normally investigate and bring about prosecutions; that is, the FCIC, CFTC and SEC. Because of budget freezes, budget cuts and refusal to increase budgets, we may never see anyone prosecuted for bringing down the financial system that caused The Great Recession. Washington's Blog explains:
Politicians Slash Budget of Watchdog Agencies ... Guaranteeing that Financial Fraud won't Be Investigated or Prosecuted
by author at Washington's Blog
. . . .
You can tell a lot about the questions which the government is truly interested in finding answers to by the amount of money it authorizes for the various investigations.
The lack of any real interest in uncovering - let alone prosecuting - financial fraud is again on display.
The tensions offer a taste of spending battles to come at the CFTC and Securities and Exchange Commission if, as seems increasingly likely, Congress refuses to increase the agencies' funding to deal with new mandates created by the Dodd-Frank financial-reform act.
These squabbles have a long history, and often involve budget-process bluffing and gamesmanship between Congress and regulators. The regulators say it's different this time because of the extensive new responsibilities they have been handed under last year's Dodd-Frank legislation. The two agencies say they need another 1,200 staff in total to implement and enforce the sweeping financial overhaul.
"If the requested budget increases are not granted, we will manage within our allocated resources but we'll face a lot of bad choices," Luis Aguilar, a Democrat SEC commissioner, said in an interview.
Such tough choices are already being faced by the CFTC, which has cut $11 million from this year's technology budget, some of which was supposed to help the agency expand an automated surveillance system to examine trades in the futures market.
The system is used to scan millions of trades, looking for patterns that suggest potentially illegal activity. It has only a "handful of alerts, when we need dozens of them," according to someone familiar with the situation.
"It's something we should already have had," Mr. O'Malia, the Republican, said in an interview. "Technology is important in every investigation. We need to look at massive amounts of data, millions of trades."
Enforcement work at the SEC is also suffering from an austerity drive, say SEC officials. A ban on nonessential travel has left a number of investigations "in limbo," according to a person familiar with the situation. The person said that foreign bribery cases are being hit particularly hard, because of the need for overseas travel to investigate the allegations.
Complex accounting-fraud cases are also being affected by curbs on the use of expert witnesses, the person said.
"We've had budget freezes before. But this level of clampdown, with every nickel being flyspecked before we can spend it, is unprecedented in my experience," the person said.
Mr. Aguilar warned that the current funding squeeze was "debilitating" for the SEC. "The adverse impact that it has cannot be overstated," he said.
Rep. Scott Garrett (R., N.J.) a top member of the House Financial Services Committee, last month argued that the big spending increases being sought by the agencies "would further the mindset that our nation's problems can be solved with more spending, not more efficiency."
Read the entire article here