Distinguishing fraud from failure: A prosecutorial primer

If public sentiment dictated how prosecutors made decisions, executives at many of the nation's banks, investment houses and mortgage lenders would probably be facing charges by now. But anger isn't one of the criteria cited in the laws that govern what constitutes illegal behavior in the securities world. To bring either civil or criminal charges against individual executives whose actions may have contributed to the financial crisis, federal authorities will most likely turn first to a favorite tool of regulators and prosecutors: the Securities and Exchange Commission's Rule 10b-5.

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