5 ms·

Laws need to be written to hold the c-suite personally responsible for fraud. Otherwise there’s basically every incentive to commit fraud and consider it a cost

by qzw 4y ago

Laws need to be written to hold the c-suite personally responsible for fraud. Otherwise there’s basically every incentive to commit fraud and consider it a cost of doing business. There’s a sitting U.S. senator with presidential ambitions who presided over the largest Medicare fraud in history when he was CEO of a healthcare company. He claimed ignorance and got off scott free.

causi 4y ago
We need a constitutional amendment guaranteeing that criminal fines must exceed the profit gained by unlawful action.
- qzw 4y ago
  Would be a good start, but even then, if there's a low probability of getting caught, a lot of business people might roll the dice. There needs to be serious jail time for serious fraud.
- im3w1l 4y ago
  I think it should be fine > min(money gained, damage caused) Say you have a sample worth billions that is about to expire and you do some speeding to get it delivered and analyzed in time. Then the fine should be in the hundreds not in the billions.
  - andreareina 4y ago
    Divide by the probability of successful enforcement
- ixwt 4y ago
  I've been of the mind that it should START with any profits. Then the fine. It was a crime after all. They should be required to disgorge any gains, and then be penalized. I worry how hard it would be to calculate these numbers though. Especially with creative accounting. That could be another part of the fine though: the cost of the forensic accountants to determine profits.
  - thereddaikon 4y ago
    It should be both. The calculus needs to be reworked so that its never a more profitable move to break the law. That's why it keeps happening today after all, its just considered the cost of doing business. People should go to jail, the company should lose any gains it made from the action and there should be a fine on top. They should unequivocally be worse off because of it.
    - Loughla 4y ago
      Honestly, I have yet to hear a good argument for why people who commit fraud and other white-collar crimes shouldn't serve jail sentences. I also believe that strict sentencing for white collar crime (like we do for literally everything else) might actually be a deterrent. I have heard the argument that being overly punitive will force businesses to be too conservative in their dealings for fear of accidentally breaking the law, but I just don't buy that.
      - thereddaikon 4y ago
        The reason, and I don't think its a good one, as I understand it has to do with the hacky way in which our legal system treats corporations. A corporation isn't its own class of entity. Its basically a a repurposed concept of a person. "Corporate personhood" is the term. They are and aren't people at the same time. They are because the law says so. They aren't because reality says so. You end up with weird consequences like how do you punish a corporation thats broken the law? Well you cant jail one really. So the only recourse most of the time are fines. People didn't break the law, the corp did. Which is also a person because we said so. What we need is a constitutional amendment that defines a corporation as a separate entity from people and sets the standards for who is criminally responsible for a corp. Personally I feel it should be some combination of the owners and the executives running it. Usually its the executives that are the cause for evil but the owners often incentivize them to do so.
  - hef19898 4y ago
    Take revenue instead of profit and make it impossible to claim those fines as losses for tax purposes.
- generalizations 4y ago
  > profit gained by unlawful action That is awfully hard to calculate, and even harder to calculate fairly. Hollywood accounting, "unrealized gains/losses", and the way film companies calculate every individual digital copy of a pirated movie as a separate monetary loss all indicate that there is no way such a law would not be abused.
roamerz 4y ago
If he was in fact guilty I wonder if he joked around privately about getting off Scott free?
jonahbenton 4y ago
Might you say he got off rickscott free?
mikeodds 4y ago
Who out of interest?
- genghisjahn 4y ago
  https://en.m.wikipedia.org/wiki/Rick_Scott https://en.m.wikipedia.org/wiki/Rick_Scott
hrbf 4y ago
Exactly this. As long as there are no painful personal consequences for fraud, this will keep happening. In this case, $8M is casually written off as cost of doing business. This is utterly insane.
VoodooJuJu 4y ago
A man needs a name
- stingraycharles 4y ago
  Rick Scott, I assume. “ During his tenure as chief executive, the company defrauded Medicare, Medicaid and other federal programs. The Department of Justice ultimately fined the company $1.7 billion in what was at the time the largest health care fraud settlement in U.S. history.” https://en.m.wikipedia.org/wiki/Rick_Scott https://en.m.wikipedia.org/wiki/Rick_Scott
lupire 4y ago
Sarbanes-Oxley was supposed to do this. https://en.m.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act https://en.m.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

by qzw 4y ago

causi 4y ago

We need a constitutional amendment guaranteeing that criminal fines must exceed the profit gained by unlawful action.

qzw 4y ago
Would be a good start, but even then, if there's a low probability of getting caught, a lot of business people might roll the dice. There needs to be serious jail time for serious fraud.
im3w1l 4y ago
I think it should be fine > min(money gained, damage caused) Say you have a sample worth billions that is about to expire and you do some speeding to get it delivered and analyzed in time. Then the fine should be in the hundreds not in the billions.
- andreareina 4y ago
  Divide by the probability of successful enforcement
ixwt 4y ago
I've been of the mind that it should START with any profits. Then the fine. It was a crime after all. They should be required to disgorge any gains, and then be penalized. I worry how hard it would be to calculate these numbers though. Especially with creative accounting. That could be another part of the fine though: the cost of the forensic accountants to determine profits.
- thereddaikon 4y ago
  It should be both. The calculus needs to be reworked so that its never a more profitable move to break the law. That's why it keeps happening today after all, its just considered the cost of doing business. People should go to jail, the company should lose any gains it made from the action and there should be a fine on top. They should unequivocally be worse off because of it.
  - Loughla 4y ago
    Honestly, I have yet to hear a good argument for why people who commit fraud and other white-collar crimes shouldn't serve jail sentences. I also believe that strict sentencing for white collar crime (like we do for literally everything else) might actually be a deterrent. I have heard the argument that being overly punitive will force businesses to be too conservative in their dealings for fear of accidentally breaking the law, but I just don't buy that.
    - thereddaikon 4y ago
      The reason, and I don't think its a good one, as I understand it has to do with the hacky way in which our legal system treats corporations. A corporation isn't its own class of entity. Its basically a a repurposed concept of a person. "Corporate personhood" is the term. They are and aren't people at the same time. They are because the law says so. They aren't because reality says so. You end up with weird consequences like how do you punish a corporation thats broken the law? Well you cant jail one really. So the only recourse most of the time are fines. People didn't break the law, the corp did. Which is also a person because we said so. What we need is a constitutional amendment that defines a corporation as a separate entity from people and sets the standards for who is criminally responsible for a corp. Personally I feel it should be some combination of the owners and the executives running it. Usually its the executives that are the cause for evil but the owners often incentivize them to do so.
- hef19898 4y ago
  Take revenue instead of profit and make it impossible to claim those fines as losses for tax purposes.
generalizations 4y ago
> profit gained by unlawful action That is awfully hard to calculate, and even harder to calculate fairly. Hollywood accounting, "unrealized gains/losses", and the way film companies calculate every individual digital copy of a pirated movie as a separate monetary loss all indicate that there is no way such a law would not be abused.

roamerz 4y ago

If he was in fact guilty I wonder if he joked around privately about getting off Scott free?

jonahbenton 4y ago

Might you say he got off rickscott free?

mikeodds 4y ago

Who out of interest?

genghisjahn 4y ago
https://en.m.wikipedia.org/wiki/Rick_Scott https://en.m.wikipedia.org/wiki/Rick_Scott

hrbf 4y ago

Exactly this. As long as there are no painful personal consequences for fraud, this will keep happening. In this case, $8M is casually written off as cost of doing business. This is utterly insane.

VoodooJuJu 4y ago

A man needs a name

stingraycharles 4y ago
Rick Scott, I assume. “ During his tenure as chief executive, the company defrauded Medicare, Medicaid and other federal programs. The Department of Justice ultimately fined the company $1.7 billion in what was at the time the largest health care fraud settlement in U.S. history.” https://en.m.wikipedia.org/wiki/Rick_Scott https://en.m.wikipedia.org/wiki/Rick_Scott

lupire 4y ago

Sarbanes-Oxley was supposed to do this. https://en.m.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act https://en.m.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act