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White-Collar Sentencing: A Loss of All Sense of Proportion

By Irvin B. Nathan

Imagine the following scenario: The CEO of a large public company (with approximately 1 billion shares outstanding, considerably fewer than General Electric, Microsoft or General Motors) pleads guilty to a material misrepresentation in the company's financial reports, which, according to the government, when disclosed caused the company's stock to drop 50 cents per share.

Just 16 months ago, that CEO would be facing, under the federal sentencing guidelines as they then existed, a sentence in the range of 7 to 9 years. A hefty sentence. But nothing remotely like the CEO would face today. As a result of 'emergency guidelines' promulgated last month by the Sentencing Commission, for the identical crime committed after January 25, 2003, the same CEO would face a mandatory life sentence, even after pleading guilty. In contrast, if a top executive killed someone and was convicted of voluntary manslaughter, he or she would receive less than 6 years in jail under the guidelines, and no more than 14 years for second-degree murder.

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