Panel Investigating Financial Crisis Is Said to Refer Cases to Justice Dept.

The panel appointed by Congress to investigate the causes of the financial crisis referred a handful of cases involving potential wrongdoing to the Justice Department, a person close to the investigation said Monday evening.

Financial Crisis Inquiry Commission chairman Phil Angelides.
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Financial Crisis Inquiry Commission chairman Phil Angelides.

The referrals were made as a precaution to ensure that federal authorities were aware of potential misconduct the panel came across during its yearlong investigation, according to the person, who spoke only on the condition of anonymity because the referrals were intended to be confidential.

The person said that a civil investigation would be the most likely outcome of the referrals and that criminal charges were unlikely.

Most of the potential violations concerned securities laws, the person said, without naming any individuals identified. The referrals were approved by votes of the panel, the Financial Crisis Inquiry Commission, last year, the individual said. The Huffington Post reported some details of the referrals on Monday evening.

The panel intends to wrap up its work on Thursday, with the release of a book-length report that details multiple causes of the 2008 crisis, from deficiencies in regulatory oversight to Wall Street excesses that abetted the subprime housing bubble. The report will be published in two versions: one by the publisher PublicAffairs (on sale for $14.99) and the other by the Government Printing Office.

The 10-member commission has been sharply divided in reaching its conclusions. The final report — totaling 576 pages in the commercially available version — will reflect the majority viewpoint of the six members appointed by Congressional Democrats. But the four members named by Republicans have written separate dissents.

The commission conducted 19 days of hearings and interviews with 700 witnesses. Its work was loosely modeled on the Pecora hearings, which the Senate conducted in the 1930s to investigate the causes of the Depression, and on the 9/11 Commission, whose final report, published in 2004, was a surprise best seller.

Though the financial crisis led to the loss of more than eight million jobs and a continuing overhaul of Wall Street regulations, it has resulted in few criminal prosecutions.

The commission is hoping that the report will serve as a definitive explanation of the origins of the crisis.

The law that President Obama signed in May 2009 that established the commission required the panel to complete its work by Dec. 15, 2010, but the Democratic majority announced in November that it would need more time, in part to accommodate the production schedule required in putting out a book.

The commission now intends to cease operations by Feb. 13.