So long as this continues, there will be no solution to corporate fraud.
The bank simply has to pay a fine. This is similar to what GSK recently did.
That might, at first blush, appear to be a decent deterrent.
It isn’t because the company can pass the cost on to its customers, and in some cases pass the cost onto the very people that were defrauded, effectively forcing the victims to pay twice!
There are only two effective means of punishment for corporate crimes.
- Prison. For the individuals, including the executives, of the firm(s) involved.
- Imprisonment for the corporation. That is, the suspension or revocation of the firm’s corporate certificate, thereby either barring it from operating as a corporation for some period of time (as with a prison sentence) or permanently (as would be the case for a “life term”.) The latter is certainly appropriate under a “three strikes” rule.
Nothing else will do, and until we see the end of simple monetary penalties there will be no solution to the problem of corporate crime, even when the fraud involved is in the largest markets in the world.
We the people must insist that the above two punishments be served upon all corporate frauds.