The Times reports:
For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.
But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.
This lead a friend of mine on Facebook to observe that:
Next time you want to talk about the need for criminal wrongdoers to take personal responsibility, think of these wrongdoers. What kind of message do we send that we lock up people on three strikes for drug offenses but go easy on people who steal BIG money?
There's a core problem here. When you punish an entity, you're really punishing the entity's shareholders. The more severe the penalty, the worse of a hit the shareholders take. But the shareholders are not morally culpable for the entity's wrongdoing. Hence, the proper approach to punishing organizational misconduct is to punish those agents of the organization who committed the wrongdoing (and those who authorized it). This is just basic stuff, but it gets ignored all the time. See, e.g., Jennifer H. Arlen & William J. Carney, Vicarious Liability for Fraud on Securities Markets: Theory and Evidence, 1992 U. ILL. L. REV. 691.
