Zachary Fardon, the recently appointed US Attorney for the Northern District of Illinois, has announced the creation of a new Securities and Commodities Fraud Section in Chicago. The new Section will specialize in investigating and prosecuting crimes relating to the operation of the country's securities and commodities markets.

The Chicago-based Section will be the second of its kind in the country. Until now, the Manhattan-based US Attorney's Office for the Southern District of New York has been the only other office with a specialized Securities and Commodities Fraud Task Force within the US Department of Justice. The New York Task Force investigates all varieties of securities fraud, insider trading, market manipulation schemes, accounting and regulatory reporting frauds, and penny stock "pump and dump" schemes. It also works in close coordination with the Securities and Exchange Commission and the FBI to uncover these financial frauds.

The creation of the new Securities and Commodities Fraud Section in Chicago may signal increased federal scrutiny of the securities and commodities industries in the region. Chicago is considered the birthplace of the US futures and options markets. It is home to the CME Group, which includes the CME, CBOT, NYMEX, and COMEX exchanges.  

The new Section was formed in the Criminal Division of the US Attorney's Office for the Northern District of Illinois and includes 12 prosecutors led by Assistant US Attorney Jason Yonan. Previously, the larger Financial Crimes Section of that office investigated and prosecuted alleged securities and commodities fraud. The US Attorney's Office can bring criminal charges against alleged wrongdoers in these areas, whereas the SEC and the Commodity Futures Trading Commission can bring only civil actions.

The creation of the new Section comes on the heels of an announcement in January 2014 that the US Attorney's Office for the Northern District of Illinois collected $78.1 million in civil and criminal actions in fiscal year 2013. In particular, the Financial Litigation Unit in Chicago collected more than $31 million in criminal actions, including more than $1.8 million in criminal fines; more than $16.7 million in restitution owed to the federal government; and more than $12.9 million in nonfederal restitution owed to victims, including the victims of various financial frauds and Ponzi schemes.

Learn more about our Professional Liability practice.

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2014. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.