1. Expert network becomes hot jargon.
Get used to hearing the term "expert network," which could be to this decade what "Wall Street analyst" was to the last one. After the crackdown on analyst conflicts in 2002, sophisticated investors like hedge funds began turning to specialized firms that link investors to what the firms call "business decision makers." Expert networks claim to give investors up-to-the-minute information on companies and industries. But are they actually glorified conduits for illegal inside information? Prosecutors and regulators will try to make that case in 2011.
2. Growing backlash to war on corporate crime.
Companies and individuals will say the government is overeaching. Wall Street will push back on the federal insider trading crackdown, arguing the feds are trying to criminalize smart business practices. Federal prosecutors are not accustomed to losing, though, and they show no signs of backing down when it comes to financial fraud. Neither does the SEC, still recovering from the Madoff debacle, and determined to show how tough it is. Speaking of which...
3. Judgement time for Madoff family members.
Did Bernie Madoff ever go away? Yes, the Ponzi King went to prison in 2009, but the investigation never ended. In 2011, the Scam of the Century will be back front and center. Brother Peter Madoff and sons Andrew and Mark* have been looking over their shoulders ever since Bernie confessed in 2008. Whether or not the feds move against them, the heat will be on big time in the new year.
4. The financial crisis becomes a distant memory.
What financial crisis? The global economy narrowly escaped the abyss in 2008, and while there has been plenty of finger-pointing over who was to blame, no one has gone to jail. That won't change in 2011. Don't hold your breath waiting to see any big figures from 2008 in handcuffs in 2011. With prosecutors moving on to more provable crimes (like insider trading), some bygones may simply be bygones.
5. A new sheriff in Albany starts to make his mark.
Eric Schneiderman replaces New York Governor-elect Andrew Cuomo as attorney general. Schneiderman, a Democrat, has promised to follow in Cuomo's crusading footsteps, but he very well may stomp harder than the sometimes accomodating Cuomo. Lacking the name recognition of his predecessor, Schneiderman will seek to make his own mark—like another formerly unknown AG did years ago. His name: Eliot Spitzer.
(*Reporter's' note: These predictions were published on Dec. 1 before Mark Madoff killed himself. The suicide will not lessen the focus on his brother Andrew, or Bernie's brother Peter.")