White Collar Crime

Should wrongdoer CEOs get higher sentences based on stock drops? Guidelines could be revised

Federal sentencing guidelines that ratchet up sentences based on financial loss are getting another look.

Critics say the guidelines rely too much on financial loss calculations that can mean life in prison for executives whose wrongdoing leads to a fall in stock price, the Wall Street Journal (sub. req.) reports.

The U.S. Sentencing Commission has identified possible revisions to financial-crimes guidelines as a priority after statistics showed judges are increasingly departing from the guidelines in such cases. Judges issued below-guidelines sentences in 23 percent of fraud cases from 2007 to 2011, compared to 9.6 percent from 1996 to 2003. The commission will hold a symposium in September to gather comments on potential changes.

The debate comes as former Enron CEO Jeffrey Skilling goes to court on Friday in a bid to get his 24-year sentence reduced by as much as 10 years in exchange for an agreement to halt legal challenges to his conviction.

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