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Oct 27

Avoiding a Rush to Judgment: Overcriminalization and the Subprime Meltdown

Location: The Heritage Foundation's Lehrman Auditorium

Most of the credible, leading financial experts and economists agree at this early stage of the subprime crisis that the causes of the meltdown are predominately economic: too many risky and now-defaulting mortgages, the resultant inflation of real estate prices, and the collapse of too many poorly understood derivatives and related securities.  These factors are not criminal.  A short period of reasoned reflection and investigation by lawmakers will likely yield the same conclusion that the majority of legal and economic experts have drawn since the savings and loan crisis 20 years ago: criminality is generally incidental to, and not the cause of, market-wide malfunctions. 

 

Existing federal criminal offenses, penalties, and enforcement authorities are almost certainly sufficient to investigate and punish any fraud, insider trading, or other criminal activity related to the subprime meltdown.  For example, Congress has already created at least 4,450 federal criminal offenses. 

 

Yet both The Economist and former Assistant Attorney General Rachel Brand have recently observed that political pressure in the wake of a crisis frequently translates into a perceived mandate on Congress to create new criminal laws - and on the Executive Branch to prosecute and convict someone.  The legal community is just now beginning to understand and remedy the detrimental effects of the federal government's over-reaching post-Enron policies (e.g., the Sarbanes-Oxley Act, DOJ's Thompson-McNulty Memoranda policies, and the SEC's Seaboard Report). 

 

Join us as prominent defense attorneys and former federal law-enforcement officials discuss why a rush to judgment generating new criminal laws and enforcement authorities would be unwarranted and counter-productive. 

More About the Speakers

Moderator
The Honorable Dick Thornburgh
K&L Gates LLP;
Former Attorney General of the United States

William R. McLucas
Wilmer Cutler Pickering Hale and Dorr LLP;
Former Director of Enforcement,
U.S. Securities and Exchange Commission

William Beach
Director, Center for Data Analysis,
The Heritage Foundation

Barry J. Pollack
Kelley Drye & Warren LLP;
Director,
National Association of Criminal Defense Lawyers