Just two decades ago, bad actors in corner offices could expect to go to prison. Remember the long sentences handed down to Jeff Skilling of Enron and Bernie Ebbers of WorldCom? Alas, tough consequences have all but disappeared for corporate criminals, reports law professor Jennifer Taub. After the global financial crash of 2008, US prosecutors took down just one participant in the mortgage meltdown. Contrast that with the 1,000-plus bankers convicted after the savings-and-loan crisis of the 1980s. Taub delves into the history and the present of white-collar convictions, and calls for a future characterized by more aggressive prosecutions of wealthy criminals.
In a new era of impunity, corporate criminals get rich at the expense of everyone else.
Corporate criminals are raking it in and doing harm to the public. In one prominent example, the Sackler family made billions marketing OxyContin as a mild painkiller with no risk of addiction. While the Sacklers grew wealthier on the success of Purdue Pharma’s blockbuster drug, more than 230,000 Americans perished of overdoses of prescription drugs from 1999 to 2018. Pacific Gas & Electric neglected maintenance of aging power lines as it doled out billions in dividends to shareholders. PG&E’s negligence led to 2018’s Camp Fire, a California blaze that destroyed thousands of homes and killed 85 people.
Examples of high-profile larceny abound. In 2010, hedge fund manager Leon Cooperman collected $4 million in illicit profits thanks to illegally obtained insider information. Blood-testing firm Theranos used bogus financial reports and test results to build a $9 billion market valuation. The company crashed, but founder Elizabeth Holmes avoided prison. WeWork co-founder Adam Neumann collected a $1.7 billion...
Jennifer Taub, a professor of law at the Western New England University School of Law, is a legal scholar and advocate who promotes transparency and opposes corruption.