A company gets ready to plead guilty to criminal wire fraud for making misleading statements and concealing information about a safety issue. Fine will be close to a billion dollars.
“GM Close to Criminal Settlement,” The Wall Street Journal, September 17, 2015 A1. Settlement looms on faulty ignition switches.
A key quotation: “[P]rosecutors are likely to open themselves to criticism if they don’t bring criminal charges against individuals at GM.” Really?
Why saddle the (comparatively innocent) shareholders of the company with a $900 million settlement and not penalize the actual employees who concealed the information and misled everyone? Sure, they may have been fired, but is that enough?
Leaving aside the timing issue in penalizing today’s shareholders for something that occurred when they weren’t shareholders, wouldn’t throwing some mid-level or high-level executives in jail send a stronger message? I guess the shareholders can sue the directors under a Caremark theory and the corporation could sue the fired employees for the loss. Now, that would send a message, at GM and elsewhere.