Corporate Law
Colorado Ballot Measure Targets Execs Who Fail to Stop Corporate Fraud
Posted Apr 1, 2008, 09:32 am CST
By Debra Cassens Weiss
A former employee at Qwest Communications is backing a ballot measure in Colorado that would create the nation’s toughest corporate fraud law.
Lew Ellingson, who had a job splicing phone cables, told the New York Times he became angry when Qwest colleagues lost their life savings after insider trading allegations against the company chief executive officer. The alleged wrongdoing led to a big drop in the company's stock price.
Ellingson is among those supporting a ballot initiative that would make business executives criminally and civilly responsible if their companies break the law, the Times story says. The executives would be at risk if they knew of corporate fraud but did nothing to stop it.
The initiative would allow any state resident to sue managers who failed to take action, with suit proceeds going to the state.