Wall Street crime should earn prison time, says top state regulator

Law enforcement summit planned to boost number of criminal cases

WASHINGTON (January 9, 2000) – White-collar criminals who commit securities fraud deserve prison time just like thieves, muggers and murderers, a leading securities regulator said today.

“Someone steals your car, they go to prison. A con artist steals the money your parents need for retirement, and maybe they get fined—that’s not right,” said Bradley Skolnik, Indiana’s Securities Commissioner and president of the North American Securities Administrators Association (NASAA). Skolnik addressed NASAA’s annual enforcement conference, in San Diego.

State securities regulators, Skolnik noted, bring more criminal cases for securities fraud than other regulators, obtaining an average of nearly 300 criminal convictions a year, according to a recent NASAA survey. “But we need to bring more (criminal cases), many more,” Skolnik said.

He said state regulators are fighting a “bull market in fraud”—from microcap stock fraud, to promissory notes and Internet scams. “White-collar criminals are cold, calculating and vicious. Many are serial violators, career criminals,” he said.

Skolnik noted the traditional barriers to criminal securities fraud cases: “The cases are complex, costly, and time-consuming…prosecutors, juries and the media understand street crime like theft and murder. Somehow securities fraud seems sanitized, bloodless.”

Skolnik proposed several initiatives:

NASAA plans to distribute updated model jury instructions for use in securities cases to prosecutors and attorneys general. “Educating juries is key to getting convictions in securities fraud cases.”

He also said NASAA plans to host a summit in Washington, DC later in the year, “where state, industry and federal securities regulators, prosecutors and law enforcement officials can brainstorm ways to work together better with the goal of bringing more criminal prosecutions.”

In addition, we need to change the way we–government, law enforcement, and society—view white-collar crime, Skolnik said. “White-collar crimes aren’t victimless crimes. Just like street crime, securities fraud ruins lives, destroys families and kills dreams. White-collar crime is not on the national agenda and it needs to be,” Skolnik said.

Skolnik’s complete remarks and the model jury instructions (in PDF Format) are available on the NASAA website.

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