A bipartisan panel investigating the financial crisis has referred cases of potential wrongdoing by financial industry officials to the Justice Department, a person familiar with the matter said on Tuesday.
The 2009 law creating the Financial Crisis Inquiry Commission instructs the congressionally appointed panel to refer anyone who may have violated the law to the Justice Department and state attorneys general.
The Huffington Post first reported the referrals on Monday night and did not identify the people implicated or their institutions. (http://www.huffingtonpost.com/2011/01/24/financial-crisis-commissi_2_n_813415.html)
The online publication cited two unnamed sources who “characterized the panel’s decision to make referrals to prosecutors as a significant escalation in the government’s response to the financial crisis.” Civil charges are more likely than criminal prosecutions, the publication reported.
Commission spokesman Tucker Warren, reached late on Monday night, declined to comment on the report.
The person familiar with the matter interviewed by Reuters downplayed the referrals saying they related to information already publicly known such as accusations of executives not being forthcoming on earnings calls and the Goldman Sachs Abacus deal.
The U.S. Securities and Exchange Commission had accused Goldman of creating and marketing the Abacus deal, which included products linked to subprime mortgage bonds, without telling investors that hedge fund Paulson & Co helped picked the bonds and was planning to bet against the transaction.