Deputy Attorney General Rod Rosenstein announced the formation of an interagency task force targeting the prevention of consumer and market fraud.
Rosenstein, who spoke at a press conference at the Department of Justice that brought together top regulators at the DOJ, the Securities and Exchange Commission, the Consumer Financial Protection Bureau and the Federal Trade Commission, said the task force was formed by President Trump and will focus on preventing financial crimes, including securities and commodities fraud, digital currency fraud, money laundering and tax and health care fraud.
“Our goal is not to prosecute fraud, our goal is to deter fraud. That will be our primary objective,” added Rosenstein, who said the task force will bring together U.S. attorney's offices, DOJ departments and enforcement agency partners to fight fraud that affects U.S. citizens.
“One of our first priorities will be to survey all of our members and identify areas of vulnerability to ensure that we devote appropriate resources to address them,” Rosenstein said.
SEC Chairman Jay Clayton, who spoke at the press conference, stressed that preventing retail fraud and preserving and returning investors’ money is critically important to the agency. He said the SEC will continue to focus on Ponzi schemes and the sale of unsuitable and complex products targeting the elderly and unsophisticated investors.
“Punishing wrongdoing is important but no more important than getting victims their money back,” Clayton said. “When our investigative teams detect possible ongoing violation, they try to locate profits for fraudulent activity. The commission often files emergency actions. I've been at the agency for over a year now and in that time the commission has obtained over 20 temporary restraining orders and approximate 30 asset freezes.”
As an example, Clayton said the SEC shut down an allegedly fraudulent initial coin offering in January that claimed to have raised over $600 million. “Not only did we stop the alleged scheme, but we successfully prevented the participation of investor funds by obtaining a freeze of the digital assets at a court appointed receiver to secure various cryptocurrencies held by the defendants,” he added.
“We recognize close partnerships with our federal regulators and law enforcement agencies are vital in helping us protect and respond to fraud,” Clayton said. “The SEC is proud to support this task force and I commend the president and attorney general for their leadership in this important effort.”
Last year, DOJ obtained more than $3.7 billion in settlements and judgments in civil cases involving fraud, Rosenstein said. Total recovery since 1986 amounted to more than $56 billion. The agency also paid almost $6.6 million to whistle blowers who came forward to report fraud and assist our investigations.
“This new task force on market integrity and consumer fraud will allow us to do even more in a coordinated way,” Rosenstein said. “The president's order directs the task force to invite participation from our law enforcement agency partners in many departments and agencies. By working together, we can achieve more effective and more efficient deterrents.”