Obama Orders Creation of Financial Fraud Task Force

President Obama issued an executive order that calls for the establishment of an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime and prevent another financial meltdown.

The Department of Justice will lead the task force and the Department of Treasury, Housing and Urban Development, and the Securities and Exchange Commission will serve on the steering committee. The task force's leadership, along with representatives from a range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims, according to a release.

The task force replaces the Corporate Fraud Task Force established in 2002. It will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government's law enforcement and regulatory apparatus.

When asked how this task force would be different from the original, attorney general Eric Holder said the "breadth" of the task force would make the difference, according to a Reuters report. The attorney general will convene the first meeting of the Task Force in the next 30 days.

"Through the Financial Fraud Task Force, we are making clear that the Obama Administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud," said Treasury Secretary Geithner said in a statement. "It's not enough to prosecute fraud only after it's become widespread. We can't wait for problems to peak before we respond. We're seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they're able to cause extensive, system-wide damage to our economy."

The task force is composed of senior-level officials from a diverse range of departments and agencies, from the FDIC to the FBI to the Department of Labor to the Secret Service to the Small Business Administration. In addition, the attorney general will invite representatives of the National Association of Attorneys General, the National District Attorneys Association and other state, local, tribal and territorial representatives to participate in the task force through its Enforcement Committee.