The misconception that the government has gone soft on white-collar crime is alive and well. This is unfortunate for investors, hedge fund managers, financial advisers and corporate officers in the financial industry among others. White-collar professionals need to be wary of the pending public backlash and over-correction by enforcement agencies and prosecutors.
Why the backlash?
Stories like these go a long way toward creating the misconception that white-collar crimes are going unpunished at worst and lightly punished at best. Calling sentences “shockingly low” and “very lenient” has a way of riling people up, particularly when combined with the class and race issues present in the conversation on criminal justice reform (Source: “Is white-collar crime treated more leniently in the US?”, BBC News).
Despite the inaccuracy of the perception that white collar criminals are getting away with it, the idea that the government and prosecutors are going easy on the rich, powerful, or connected does not go over well with the average American voter. This leads to upset voters, providing politicians running in state and federal elections in 2020 the opportunity to run on making corporate criminals pay. It also provides incentive for prosecutors with an eye on future promotions to make an example out of alleged white-collar criminals in their jurisdiction.
What does this mean for people in the financial industry? It means that simple misunderstandings or minor transgressions are more likely to be treated harshly with an eye on looking tough on white-collar crime. Without that benefit of the doubt, finding yourself on the wrong side of the SEC or other enforcement organizations can have harsh consequences.
One thing remains the same: Ford O’Brien Landy LLP has a proven track record of helping people protect their rights and reputations when faced with white-collar criminal charges.