Taking office in February 2009, Attorney General Eric Holder faced an enormous challenge—some would say enormous opportunity—in the realm of white-collar criminal enforcement. The country was in the midst of a financial crisis, caused most immediately by a sharp collapse in real estate prices, resulting in trillions of dollars of losses in securities closely tied to real estate.
The enormous losses led to widespread calls to hold people accountable for criminal activity, but criminal investigations and prosecutions faced a number of obstacles. Among them were the difficulty of distinguishing between losses due to fraud and losses due to market and economic forces, and distinguishing between a fraudulent state of mind and genuine uncertainty about the future, particularly given the complexity of the underlying transactions and large number of institutions and individuals, including leading government officials, who were shocked by the severity and suddenness of the real estate collapse.1 Though some of the effects of the financial crisis have dissipated, Attorney General Holder’s record in white-collar enforcement may, to a large extent, be defined by competing views about whether the department responded to the crisis appropriately.
