January 29, 2005

How to make investors whole?

An Associate Press article that ran widely throughout the country and focusing on how the SEC can punish corporate crime without penalizing shareholders, includes comments from WSU law professor Peter Henning, a former SEC attorney. At issue is interpretation of a recent SEC statement regarding financial penalties to corporations for wrongdoing. The statement said the commission "is expected to seek penalties from culpable individual offenders acting for the corporation." But Henning says the statement is so general that it doesn't say much. "It's kind of what everyone knew already: If you cooperate, it's going to help you." He points out that the extent of wrongdoing and the time frame it covered are factors the SEC considers in recommending penalties.

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