There's a new hotspot for financial fraud prosecution - Virginia.
Federal and state officials today announced the creation of the Virginia Financial and Securities Fraud Task Force, a criminal/civil partnership to investigate and prosecute financial fraud in Virginia and nationwide.
The task force includes the U.S. Attorney's Office for the Eastern District of Virginia, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Bureau of Investigation, the Virginia attorney general’s office and others.
But why Virginia? According to Neil MacBride, U.S. attorney for the Eastern District of Virginia, his office has jurisdiction over any publicly traded company that files corporate disclosure reports via the SEC’s EDGAR database, which is located in Alexandria, Va.
In 2007, the U.S. Court of Appeals for the 4th Circuit in U.S. v. Johnson ruled that EDGAR makes the Eastern District an appropriate venue for securities fraud cases.
“It has become all too clear that the complex financial crimes we confront are national in scope,” said MacBride in a statement. “They require criminal and civil authorities across the country to utilize every tool at their disposal to ensure that the guilty are held accountable. The Eastern District of Virginia has the legal authority to bring cases here with national significance, regardless of where the fraud occurs.”
Added Robert Khuzami, director of the SEC’s Division of Enforcement, “Financial fraud schemes can be sophisticated, difficult to detect, and span multiple jurisdictions. Opportunities to coordinate civil and criminal law enforcement efforts, such as those provided by this task force, are vital to combating financial fraud.”
The task force members are committed to conducting parallel investigations and sharing as much information as possible. The group is also intended to be an investigative arm of the President’s Financial Fraud Enforcement Task Force, a national interagency group.