Identifying and prosecuting securities fraud is a specialized skill set within law enforcement. Federal investigators have to know what they’re looking for (and also looking at, in their examination of a company’s financial records) in order to decide whether the standard has been met to bring criminal charges.
Often, they turn to FINRA’s Criminal Prosecution Assistance Group (CPAG) for help. FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States.
CPAG is a part of its Office of General Counsel, and although the group has no subpoena or prosecutorial authority of its own, its small staff of experts will act when called upon as financial forensic sleuths to assist the feds in bringing securities fraudsters to justice.
This system was explained to securities law students at The Catholic University of America Columbus School of Law on Jan. 30 by Peter J. Melley, assistant director of CPAG.
His remarks, “FINRA’s Helping Hand to the Feds in Prosecuting Financial Fraud,” detailed the many ways his group has been called upon to assist.
“We’re very unique, there’s no other group in the securities arena like us,” said Melley.
CPAG works exclusively on criminal investigations and prosecutions involving securities-related crimes. It has assisted with FBI undercover operations, trials involving market manipulations, sales practice abuses, financial fraud, insider trading, computer intrusions and money laundering.
Melley, one of only four members of the CPAG team, has testified in more than twenty criminal jury trials.
“We’ve definitely been able to carve out a niche,” said Melley, noting wryly that lack of work is never a problem. He also invited CUA law students to apply for a current externship opening in his office.