Operation Broken Trust -- or should that be Broken Truss?

December 6, 2010

On December 6, 2010, the United States Department of Justice issued yet another in a very, very, very long line of press releases: Financial Fraud Enforcement Task Force Announces Results of Largest-Ever Nationwide Operation Targeting Investment Fraud.  

Frankly, that's about all that government seems to do these days - you know, the old slap on their own back, feel-good, puffery about the wonderful job that they're doing . . . the same job that (well, how can I soften this?) they haven't really been getting done for far too long.

So -- you'll understand if I'm not exactly jumping for joy about this latest media blitz.

Operation Broken Trust

The fancifully titled Department of Justice press release states that:

Attorney General Eric Holder announced today the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country. The operation's criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.

. . .

The interagency Financial Fraud Enforcement Task Force was established by President Obama to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, within a three-and-a-half month period, Operation Broken Trust involved 231 criminal cases and 60 civil enforcement actions. Eighty-seven defendants have been sentenced to prison, including several sentences of more than 20 years in prison.

For starters, is there like someone who works full-time for the government and is charged with coming up with all the names for military and regulatory operations?  Operation Iraqi Freedom. Operation Enduring Freedom, Operation New Dawn. Operation Broken Trust. Seriously, how do they come up with these names?  More to the point, should we really be comparing this latest Wall Street anti-fraud/crime effort to a military operation?  I know that "Operation Broken Trust" sounds cool and all but there is hardly any live ammunition involved. 

Putting my personal distaste for the naming of the Wall Street sweep aside, I was actually quite taken with the "aggressive, coordinated and proactive effort to investigate and prosecute financial crimes." The wordsmithery involved in the press release is superb. Ain't adjectives wonderful? Now if only you could award medals for copywriting like you do for battlefield bravery.  Okay, so don't get me started on that again.

Everyone Get's A Little Publicity

Apparently, Operation Broken Trust was conducted in conjunction with various Department of Justice components - including the U.S. Attorney Offices, the FBI, the Criminal and Civil Divisions and the U.S. Trustee Program - as well as the SEC, USPIS, the CFTC, IRS-CI, the Federal Trade Commission, the U.S. Secret Service and the National Association of Attorneys General.

If you read the press release, you will be thrilled to see that some representative from virtually each and every one of those components gets to make an exhilarating quote in the press release. It's as close to a Cecille B. DeMille cast of thousands as these things get.  Filmed on the actual location where these events occurred. Thrill to the parting of Wall Street.  Watch in awe as the task force sweeps down upon the evildoers.

A Double-Edge Warning

I also marveled at Attorney General Holder's commentary in the press release about sending a strong message:

To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan - we will use every tool at our disposal to find you, to stop you, and to bring you to justice.

What a comforting and helpful bit of advice. All the public needs to do to protect itself against increasingly sophisticated and pernicious investment fraud is to be alert, protect itself, and report the schemes. I hope you've all written down that prescription. Maybe the mnemonic APR will help you? Alert . . .Protect . . . Report.

If you are familiar with my published work over the last two decades, then you know that I detest the flabby message from prosecutors and regulators alike about how those who engage in investment scams, frauds, and flim flams should quake in their boots because the ersatz Wall Street cavalry is on the way. I'm sure that the future, wannabe Madoffs are frozen in fear about the threat by the Attorney General that Wall Street's cops are now going to "use every tool at our disposal to find you, to stop you, and to bring you to justice." Of course, those tools have long been sitting out back, in the toolshed, rusting, but, hey, we got a whole new bunch of eager beavers ready to start sawing and sanding away.

The Tom Landry School of Professionalism

For me, reading the Operation Broken Trust press release is like watching a professional football game on television where the home team is down by three touchdowns with one minute left to play in the game and the quarterback throws a dinky little pass to some overpaid wide receiver, who then proceeds to score a meaningless touchdown. 

And what happens when that arrogant jerk of an athlete winds up in the end zone (where he should have been several times during the game when it mattered)? Oh, he slams the ball down as if he won the game, he does some moronic dance that he named after himself, he high fives everyone in sight, and the stadium erupts with fireworks and blaring arena music -- as if home team isn't going to lose the game and finish the season with a 2 and 14 record. 

Oh, c'mon Bill, what's wrong with celebrating every time we score a point?

Many years ago, when I was a much younger and far less grumpy guy, I remember watching a Dallas Cowboy football player spike the ball in the end zone after scoring a touchdown and doing some foolish dance.  According to legend, that player was pulled aside by the venerable Cowboy coach, Tom Landry, and reprimanded with the admonition that "Next time you're in the end zone, act like you've been there before!"

I guess times have changed.  These days, it's simply about calling attention to yourself, even if it's not warranted or deserved.

A Broken Truss?

Oh, and just in case one press release isn't enough for you, there's a second press release on the Department of Justice website today titled: Attorney General Eric Holder Speaks at the Operation Broken Trust Annoucement. How thoughtful! Not only did the Justice Department issue a press release about Operation Broken Trust but the Attorney General issued a second press release publicizing his speech about the announcement of the Operation Broken Trust event. Nothing wrong with wearing a belt and suspenders.

As usual, it's all over-the-top.  Too much form. Too little substance. Too many government officials elbowing for the spotlight. Too little, too late. Alas, the painful hernia of Wall Street regulation has proved too much for the confines of its truss, and has now expanded and enlarged to a more painful state.

Hey what a great idea!  Operation Broken Truss!