The paucity of criminal indictments in the wake of credit crunch has surprised some. It's been two years since Lehman Brothers (Lehman Brothers news) failed, and many are still waiting for charges to be filed. My sense is the Ralph Cioffi and Matthew Tannin not guilty verdicts have really chilled the ardor to bring more charges, highlighting specifically the pitfalls of building cases primarily from email.

Prosecutors going after inside traders have really supplemented their investigative arsenals, which is wise. But the U.S. Attorney for the Southern District of New York may be gearing up to take another tack. Preet Bharara has set up a six-person unit, to be headed by Heidi Wendel, a former New York state deputy attorney-general, to take on more civil enforcement actions, reports the Financial Times.

The legal bar is lower in these cases, and this may provide a vehicle for bringing more cases related to the financial crisis. The unit will not limit itself to financial services industry crimes, but you have to wonder if some criminal cases will migrate over and become civil cases.

Bharara declined to comment on "whether or why there are criminal cases responding to the financial crisis," notes the FT.

For more:
- here's the FT article

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