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Some time ago (>>10 years) SEC fines were rare and they did carry the stigma you speak of, but the SEC's enforcement actions have now increased to a point where
by nickff 11y ago
Some time ago (>>10 years) SEC fines were rare and they did carry the stigma you speak of, but the SEC's enforcement actions have now increased to a point where all the banks regularly pay out fines whether or not they did anything wrong; the stigma is now gone, and the fines are just a cost of doing business.
Fighting regulators is a very dangerous game for any company, as the government will usually settle for much less than the potential fine (, usually less than the cost of fighting the fine), and the looming threat of an ongoing prosecution adds costly uncertainty to the business. In addition, the executives have a large incentive to settle because this is just the shareholders' money, and a failure to comply could be met with a criminal prosecution.
- abakker 11y agoIIRC and IANAL, there is also a strange problem that if criminal charges are brought against companies, there is a lot of fallout, and potential for the company to barred from operation. https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2010/04/11/charging-corps.PDF https://www.justice.gov/sites/default/files/criminal-fraud/l... Section IX B. seems to be the relevant one there, suggesting that regulators and prosecutors attempt to weigh the fallout that such a charge might have on innocent 3rd parties.
- evanpw 11y agoThat used to be true, but a bunch of banks have now pled guilty to criminal charges, and nothing really happened. [1] http://www.bloombergview.com/articles/2015-05-11/nobody-s-worried-about-too-big-to-jail-any-more http://www.bloombergview.com/articles/2015-05-11/nobody-s-wo...