Corporate Crime and Punishment

biochem wrote:

What really would need to be done is get the big companies to have an internal communication and management mechanism that actually works. That's a whole of a lot more difficult to implement than the taking away of bonuses though.

Actually if you take away their wrongfully earned bonuses, they'll have a very personal incentive to see to it that minimal wrongdoing takes place under their watch. Right now there is no incentive for them to do so. In fact the incentive is in the opposite direction. If they don't know, they can't be charged with a crime even if they are benefiting from the commission of one. So if they suspect a crime is occurring, right now they are incentivized NOT to investigate. Change the incentives and they will find a way to develop an internal communication and management mechanism that actually work.

How about "the Boston office committed a crime, everyone involved goes to jail for sentences of length proportional to their involvement", do not pass Go, do not continue to collect a paycheck, and we'll work out the appropriate fines to tack on top of that...

Not mutually exclusive to the civil penalty of taking away their wrongfully earned bonus. You can do both.

However the problem with criminal charges alone is that (in the USA at least) they must be PROVEN beyond a reasonable doubt. In practice proving malfeasance beyond a reasonable doubt has proven a very hard standard to meet and very very few of the guilty white collar criminals are ever convicted criminally.

However, there is a long legal tradition that one is not allowed to profit from a crime even if they did not know that their income was from criminal activity. So by also having the civil penalty of confiscating wrongfully earned bonuses, there is at least some consequence. Not as emotionally satisfying as seeing them in jail, but far better than having them get away with it entirely.

On several occasions, over many years I personally know of people who either committed suicide or died prematurely, as a consequence of losing all their savings and or house to white collar thieves such as this. These thieves then use the "little" people's cash to live the high life.

Thus it is reasonable to say that these creeps do as much damage as a mass shooter, and penalties should be similar.

We do need to increase the criminal penalties for that type of white collar crime. The slap on the wrist most of these guys get when criminally convicted is insufficient. Madoff's life sentence is the exception, we need more sentences like that.