Experts: Prosecution of Fraud Needs to be Part of Bankruptcy

May 29th, 2012
in econ_news

Econintersect:  With financial fraud rampant in the modern age banking, Chris Whalen, senior managing director at Tangent Capital Partners, Bill fraud-banSMALLRochelle from Bloomberg News and Bloomberg Law's Lee Pacchia have proposed that recovery of loses due to fraud should be a part of bankruptcy proceedings.  This is how bankruptcy was pursued for most of the past 100 years or more but recent changes in bankruptcy law have basically provided a shield of protection for fraudsters.   Many cases of fraud have not been pursued and the fraudster's still have their ill-gotten gains, according to Whalen and Rochelle.

Follow up:

The problem is the so-called in pari delicto defense stops trustees from suing for fraud in cases such as Lehman Brothers, MF Global and Bernie Madoff.  Whalen argues that appointing equity receivers, a popular remedy 100 years ago, in these cases would allow court appointees to pursue third parties on behalf of victims for fraud. The question is whether Congress is willing and able to change the law.

Here is an 8-minute video of the discussion:

Whalen-Rochelle-Pacchina-discuss-financial-fraud-video

 

John Lounsbury

References:

Analysis and Opinion articles about fraud









Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.















 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved