Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, April 22, 2007

Hurt on White Collar Crime

Of Breaches of the Peace, Home Invasions and Securities Fraud, by CHRISTINE HURT, University of Illinois College of Law, was recently posted on SSRN.  Here is the abstract:


In some quarters of academia, commentators have criticized the lengthy prison sentences meted out to corporate officers convicted of violating federal laws pertaining to white collar crimes. These sentences, made more harsh by amendments to the Federal Sentencing Guidelines pursuant to the Sarbanes-Oxley Act of 2002, are seen as disproportionate to the harms created by the acts and inconsistent with the punishments given for violent crimes under state law. For example, the former President of Enron, Inc., Jeffrey Skilling, was sentenced to over twenty-four years in federal prison, just over the minimum sentence calculated by the Guidelines, for violating securities laws; however, in his home state of Texas, to face a mimimum of twenty-four years in prison, a murderer would have to kill five individuals without provocation or passion. This disparity, although not unique in comparing state crimes to other federal crimes, such as drug possession and distribution, poses the question: Is Jeff Skilling worse than a serial killer?

This Essay comes to the unsettling conclusion that the harsher punishments now available for corporate crime, particularly securities crime, are neither disproportionate or inconsistent with state law crimes after examining the values that society places on the interests protected by such punishments. This Essay presumes that prohibitions and punishments of certain acts reflect the relative values that society places on an interest that is threatened by the targeted activity. For example, larceny historically was criminalized to protect the public peace from breaches arising from the wresting of possession of an object from another. In addition, enhanced penalties for robbery and burglary reflect society's interest not in property but in living free from fear of bodily injury, particular in the safety of one's own home or "castle." Today, however, society's greatest fear in most parts of the U.S. is not of random violence or home intrusion but of financial insecurity in the future. This Essay presents the argument that in our modern society, maintaining the integrity of the capital markets is the new “keeping of the peace” and that to today's modern worker, a retirement account is the “castle” that needs protection from invasion.

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