Tuesday, November 9, 2010

How a Fraud's Value Affects Prison Time

Via WSJ.
The dispute is part of a growing debate over whether the sentencing system for white-collar crimes has come to rely too heavily on calculations of financial losses to fraud victims. Under the sentencing guidelines, legal experts say, an executive of a large public company convicted of a crime like securities fraud could be sentenced to life imprisonment on a first offense.
Loss calculations have "become the single most significant driving factor" in white-collar sentencing, says James Felman, a Tampa, Fla., co-chairman of the American Bar Association's committee on sentencing. The ABA is looking at recommending guideline revisions to lessen the influence of such calculations.
It can also be tricky to quantify some losses, critics argue, such as trying to determine how much impact financial manipulations had on a company's stock price.
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