Sen. Elizabeth Warren (D-MA) has announced new legislation that would make it easier to put executives behind bars for their company’s bad actions.
"Corporations don't make decisions, people do, but for far too long, CEOs of giant corporations that break the law have been able to walk away, while consumers who are harmed are left picking up the pieces," said Warren in a statement.
The Corporate Executive Accountability Act would expand criminal liability to “negligent” executives of companies with more than $1 billion in annual revenue who:
Are found guilty, plead guilty, or enter into a deferred or non-prosecution agreement for any crime.
Are found liable or enter a settlement with any state or Federal regulator for the violation of any civil law if that violation affects the health, safety, finances, or personal data of 1% of the American population or 1% of the population of any state.
Are found liable or guilty of a second civil or criminal violation for a different activity while operating under a civil or criminal judgment of any court, a deferred prosecution or non-prosecution agreement, or settlement with any state or Federal agency.
According to a summary of the bill, executives could face up to a year behind bars for the first offense and up to three years in jail for a second violation.
Warren pointed to the former chief executives of Wells Fargo and Equifax as she introduced the bill.
The bill’s summary said two CEOs of Wells Fargo “walked away to plush retirements after the bank opened 3.5 million fake accounts, wrongly foreclosed on hundreds of homeowners, and illegally repossessed thousands of cars. The CEO of Equifax also retired after allowing criminals to steal the Social Security numbers of 145 million Americans.”
Warren, who is a 2020 presidential candidate, has long argued executives need to face more responsibility for their companies’ actions that harm consumers.
“It’s been 10 years since the financial crash cost millions of people their homes, jobs, and savings. But not one big bank CEO has gone to jail. It’s time to reform our laws to make sure that corporate executives face jail time for overseeing massive scams,” Warren said in a tweet on Wednesday.
It’s been 10 years since the financial crash cost millions of people their homes, jobs, and savings. But not one big bank CEO has gone to jail. It’s time to reform our laws to make sure that corporate executives face jail time for overseeing massive scams. https://t.co/r1KzgaX0Sr— Elizabeth Warren (@ewarren) April 3, 2019
Create a permanent investigative unit for financial crimes within the Treasury Department.
Require senior executives at banks with $10 billion or more in assets to certify that there is no criminal conduct or civil fraud within the institution.
Put deferred prosecution agreements under the jurisdiction of judges so that they can ensure that the agreements are in the public interest and can supervise their implementation.
The proposals are unlikely to pass a Republican-controlled Senate, but Warren has been a fierce critic of Wall Street and has made cracking down on big business one of the key elements to her presidential campaign.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.