The FBI said it had 2,500 active corporate and securities fraud investigations under way at the end of its 2011 fiscal year.
That is up 47% in the last three years, director Robert S. Mueller III testified Wednesday to the Senate Judiciary Committee.
Over that time, the FBI has taken in roughly $23.5 billion in recoveries, fines, and restitutions and obtained 611 convictions, a record.
“Ten years ago, few were familiar with the names Raj Rajaratnam, Bernie Madoff, or Lee Farkas,’’ Mueller said. “Today, they remain symbols of unprecedented greed, whose egregious crimes have threatened the stability of our financial system and victimized countless taxpayers, homeowners, shareholders, and everyday citizens.
The FBI director cited the July sentencing of former Taylor, Bean, and Whitaker chairman Farkas to 30 years’ imprisonment for his role in a $2.9 billion fraud that contributed to the failure of Colonial Bank, one of the 25 largest banks in the United States and the sixth largest bank failure in the country.
In addition, six high-level executives and employees of TBW and Colonial Bank pled guilty, testified against Farkas, and were sentenced to prison time.
In May 2011, Raj Rajaratnam, the founder of the Galleon Group hedge fund, was convicted by a federal jury on all 14 counts pertaining to his insider trading activity. Rajaratnam was subsequently sentenced to 11 years in prison.
The wide ranging probe into illicit insider trading activity on Wall Street and in boardrooms across the United States was conducted by the United States Attorney’s Office for the Southern District of New York and the FBI’s New York Field Office.
To date, the FBI director noted, a total of 51 individuals have been charged, and 49 convictions have been obtained.
Cases against the two remaining defendants are pending.
Tom Steinert-Threlkeld writes for Securities Technology Monitor.