With the stated goal of “[improving] enforcement of mortgage fraud, securities fraud, financial institution fraud and other frauds related to federal assistance and relief programs,” both the House and Senate have passed the Fraud Enforcement and Recovery Act of 2009. (FERA). This landmark piece of legislation, among other things, redefines and broadens terms under the False Claims Act (FCA), lessens the government’s burden in establishing fraud under the FCA, and provides additional funds for the investigation and prosecution of fraud in the financial sector.
FERA will also establish a ten-member “Financial Markets Inquiry Commission” that will examine the causes of the current financial crisis. The commission will have the authority to issue subpoenas and hold hearings on issues such as the role of fraud and abuse in the financial sector, tax treatment for financial products, and corporate governance and executive compensation.
FERA was introduced, and co-sponsored, by Senators Patrick Leahy (D-VT) and Chuck Grassly (R-IA). The bill was passed by the Senate on April 28, 2009 and by the House on May 6, 2009. Sen. Leahy believes this bill will ensure accountability for fraudulent acts, and serve as an investment for the American taxpayer who recovers $32 for every dollar spent on criminal fraud litigation.