Monday, January 28, 2008

The French Do It Differently

The media has been covering the French financial trader who is accused of trades resulting in significant losses. Co-blogger Peter Henning points out some contrasts with the U.S. system (see here).  Here are more to consider:

  • What is fascinating is that the focus of the blame is not always on the individual accused of wrongdoing.  Rather, the Societe Generale is receiving media jabs as questions arise about their oversight.  If DOJ were investigating this case would they have given a non-prosecution or deferred prosecution agreement to the company in return for providing the case against the individual?
  • If this were the U.S., would other companies/banks be considering buying the company out as is reported by the N.Y.Times as a possibility (see here)?  Or would fear of DOJ prosecutions preclude such a market resolution?
  • Another difference is that there is discussion as to the motivation, or in this case the lack of monetary motivation of the individual charged here. In the United States, loss would be the driver of the train and there would be no stopping the engines once significant losses were determined.  The motive of the accused plays a part in some cases, but there are many that overlook this consideration.  The cold sentencing guidelines of the U.S. seldom offer relief in a system that examines whether the crime occurred and the amount of loss incurred.
  • Finally, John Ward Anderson at the Washington Post notes that if convicted, the accused individual could face up to seven years in prison, in addition to a fine.  As one might suspect, if the losses measure the amounts anticipated and reported in newspapers, if this individual had been charged in the United States, he would be facing a devastating penalty if convicted -- just ask Jeff Skilling and Bernie Ebbers.

In looking at all of these differences, one has to realize that when the U.S. Sentencing Commission considered uniformity, it doesn't look like they went beyond the boundaries of this country. In a "flat world" perhaps it is important to start noticing these differences.

(esp)

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