Corporate Crime Does Pay
from OnTheCommons.org:
Corporate Crime Does Pay
Major businesses repeatedly break the same laws over again to boost profits
August 28, 2012 | by David Morris
Almost daily we read about another apparently stiff financial penalty meted out for corporate malfeasance. This year corporations are on track to pay as much as $8 billion to resolve charges of defrauding the government, a record sum, according to the Department of Justice. Last year big business paid the Securities and Exchange Commission $2.8 billion to settle disputes.
Sounds like an awful lot of money. And it is, for you and me. But is it a lot of money for corporate lawbreakers? The best way to determine that is to see whether the penalties have deterred them from further wrongdoing.
New Yorkers paid $300 million extra in utility bills due to a Morgan Stanley price fixing scheme. Morgan Stanley was paid $21 million in the deal. The financial penalty they paid was an unconceivably low $4.8 million, and they did not have to admit any wrongdoing.
The empirical evidence argues they don’t. A 2011 New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.
Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America, among others, have settled fraud cases by stipulating they would never again violate an antifraud law, only to do so again and again and again. Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999. ...................(more)
The complete piece is at: http://onthecommons.org/magazine/corporate-crime-does-pay
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