By Dan Margolies
WASHINGTON, Dec 29 (Reuters) – The year of the Ponzi scheme will be followed by heightened regulation and more aggressive prosecutions, experts say, as U.S. officials respond to past failures.
Bernard Madoff’s massive $65-billion fraud grabbed most of the headlines in 2009, but other schemes that paid early investors with money from new victims came to light as the recession dried up new money and Madoff-inspired vigilance boosted awareness.
As 2010 approaches, regulators and prosecutors are scrambling to uncover and pursue more fraudsters, while lawmakers seek to close regulatory gaps through legislation and give enforcement officials more resources.
John Coffee, a law professor at Columbia University, said the Securities and Exchange Commission became a significantly tougher enforcement agency in 2009 and will probably issue lots more criminal referrals next year.
“The brief era of light-touch regulation… is gone, apparently,” he said.