05.16.13 | Blog Posts

New Justice Department’s FIRREA Cases Against Banks: Holding The Victim Responsible

The Insider: White Collar Defense and Securities Enforcement

The government's ever-evolving response to the United States financial crisis has come full circle, as civil Justice Department Attorneys seek to rely on legislation enacted to protect financial institutions from fraud to sue those very same institutions. Recently, the United States Attorney's Office for the Southern District of New York has initiated a number of law suits under the "obscure" Financial Institutions Reform Recovery Enforcement Act (FIRREA). FIRREA was enacted in 1989 in response to the massive failure of almost half of America's savings and loan institutions. In its 24 year history, the law typically has been used to bring suit against officers and directors of failed institutions. The government now seeks to expand the statute's reach to include the institutions themselves. [...]

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