It
wasn't too long ago when criminal prosecution for
suspected securities fraud in the Bay Area was
a rarity.
Although
Silicon Valley was already brimming with high-tech
activity, the number of criminal prosecutions for
fraud was at most two or three per year prior to
2000. That stood in contrast to the mounting civil
class-action lawsuits by investors against local
companies and executives.
But
times have changed.
Ever
since the formation of the Securities Fraud Unit
in the U.S. attorney's office in San Francisco in
January 2000, the number of criminal prosecutions
against misguided executives and unscrupulous insider
traders has jumped drastically.
Since
the unit's founding, prosecutors have brought 31
indictments in the Northern District of California,
up from 10 from 1996 to 1999. Most have resulted
in guilty pleas or convictions, while the rest are
pending.
Martha
Boersch, who heads the unit, said the booming high-tech
economy had created an environment ripe for such
a team. The
creation of the fraud unit is a step in the right
direction by federal authorities, he said, but the
team needs more attorneys and resources. |
