From Mother Jones · Hannah Levintova · · 2m
Trump weakens white-collar crime enforcement
Trump's administration cuts white-collar crime prosecutions and reforms.
In brief
Trump's administration cuts white-collar crime prosecutions and reforms. Trump's administration is reducing white-collar crime prosecutions and reforms to prioritize other areas like healthcare fraud and tax evasion. Originally reported by Mother Jones.
Trump halts CFTC investigation
Bloomberg reported the CFTC stopped investigating potential insider trading after Trump's top adviser ordered investigators to retract a referral to the agency's lawyers.
“The direction came from a top adviser to the agency’s Trump-appointed chairman, who ordered investigators to retract a referral to the agency’s lawyers surrounding suspiciously timed and lucrative oil trades that were executed minutes before the president sent social media posts rescinding threats to attack Iranian power plants.”
White-collar enforcement drops
Trump's second term sees declining financial crime enforcement across federal agencies including the SEC, Justice Department, and White House.
“Enforcement of financial crimes is dropping in Donald Trump’s second term, unraveling offices and reforms that will be difficult to rebuild.”
SEC dismisses crypto cases
The SEC dismissed a case against crypto exchange Coinbase and halted prosecution against a Chinese crypto entrepreneur who bought millions in tokens from a Trump family crypto venture.
“Just a few months after Trump’s reelection, the SEC dismissed a case against crypto exchange Coinbase, then halted a prosecution against a Chinese crypto entrepreneur who bought millions in tokens from a Trump family crypto venture.”
SEC staffing cuts
The SEC's enforcement division director quit after six months due to disagreements with the agency about acting against entities backing Trump, and staffing fell by 17 percent.
“Sens. Jack Reed (D-R.I.) and Elizabeth Warren (D-Mass.) sent letters to the SEC expressing concern: The director of the enforcement division that brings cases against companies quit after just six months on the job, reportedly over disagreements with the agency about acting against entities that back Donald Trump.”
SEC enforcement cases drop
The SEC initiated just five enforcement cases against companies in half a year, the lowest number in the first half of a fiscal year in at least 16 years.
“In May, a private-sector analysis found that the SEC had initiated just five enforcement cases against companies in half a year, the lowest number in the first half of a fiscal year in at least 16 years.”
Trump's lighter enforcement approach
Trump's administration has been vocal about a lighter footprint and lighter-touch approach to disciplining companies, according to Harvard professor Eugene Soltes.
“I think it’s been clear that the current administration has been very vocal about having a lighter footprint and lighter-touch approach to disciplining companies.”
FCPA enforcement pause
Trump signed an executive order pausing enforcement of the Foreign Corrupt Practices Act, arguing it was hurting American business opportunities.
“One month after Trump’s inauguration, he signed an executive order temporarily pausing enforcement of the Foreign Corrupt Practices Act, a bedrock of anti-corruption law that prohibits American companies from bribing foreign officials to benefit their business interests.”
SEC proposes rule changes
The SEC proposed rescinding the 'pay-to-play' rule and stopping enforcement of an 84-year-old agency rule that ensures shareholder concerns are disclosed in public filings.
“In September, for instance, the SEC issued a proposal to rescind what’s known as the 'pay-to-play' rule: a nearly 20-year-old measure that prevents private equity firms and other investment advisers from buying access to billions of dollars in pension funds that belong to public employees.”
Justice Department overhaul
The Justice Department consolidated divisions to create the National Fraud Enforcement Division focusing on healthcare fraud, trade fraud, tax evasion, and government fraud.
“In the spring, the Justice Department also commenced a major overhaul in how it handles corporate crime. Attorney General Todd Blanche directed the agency to consolidate several divisions that investigated different kinds of financial crime.”
White House targets fraud
The White House appointed Vice President JD Vance to oversee a task force that claims to have uncovered $260 billion in federal benefit fraud.
“This last piece has been of particular importance to the White House, which appointed Vice President JD Vance to oversee the effort, pulled together a task force to study the issue, and claims to have uncovered $260 billion in federal benefit fraud already.”
Historical patterns of crisis
Deregulation of the savings and loan industry in the late 1970s led to a third of S&Ls collapsing by the late 1980s, causing a $120 billion taxpayer bailout.
“In the late 1970s, lawmakers deregulated the nation’s savings and loan industry. By the late 1980s, roughly a third of the country’s S&Ls had collapsed, leading to bank failures and a taxpayer funded bailout of more than $120 billion.”
The main idea
Trump's administration is reducing white-collar crime prosecutions and reforms to prioritize other areas like healthcare fraud and tax evasion.
