White-collar offenses seem to be on the back burner
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It's been nearly three months since fashion-tech company CaaStle told investors that they'd been defrauded of more than half a billion dollars, and that law enforcement was investigating.
- There hasn't yet been an arrest made nor a charge filed.
- For context, Sam Bankman-Fried was cuffed just one month after FTX went bust, and the preceding narrative was that authorities were dragging their heels.
The big picture: Axios doesn't have intel on the investigation, and it's theoretically possible that there will be indictments by nightfall.
- But the situation seems to be part of a broader trend in which the Trump administration is putting white-collar offenses on the back burner.
- It's something that all investors should be aware of, if not wary of.
By the numbers: White-collar prosecutions are on track for a decades-long low in 2025, according to the nonpartisan Transactional Records Access Clearinghouse.
- The Securities and Exchange Commission under President Trump has brought 15% fewer civil actions than did former President Biden through the same point in his term.
- And 27.5% fewer than did Trump's SEC during his first term.
Zoom in: The FBI last month ordered agents to "devote more time to immigration enforcement and scale back investigating white-collar crime," per Reuters.
- Securities regulators also have backed down on several notable crypto-related prosecutions. To some that's a needed correction. To others, it's been an overcorrection — perhaps including the pause on a market manipulation case against Justin Sun, who now plans to take his Tron network public via reverse merger.
- Speaking of reverse mergers, the recent SPAC revival is getting oxygen by the perception of relaxed regulation (even though the rules themselves haven't changed).
The bottom line: Crime can pay when it isn't prosecuted.
