Professor Sandeep Gopalan, National University of Ireland
Should corporate fiduciaries who commit white collar crimes be jailed?
Abstract
A crippling financial crisis demands villains. The public mood is one of vengeance and
prosecutors have sought to deliver. The recent convictions and sentencing of Rajat Gupta,
former CEO of McKinsey, and other high profile corporate executives is calculated to satiate the
popular demand for retribution.
This paper argues that the over-criminalization of acts by corporate fiduciaries that do not even
meet the requirements of civil wrongs has corrosive effects on the expressive power of the
criminal law, over-deters beneficial conduct, imposes unnecessary costs, and conflates
blameworthiness with punishment. Focusing exclusively on acts committed by corporate
fiduciaries, I argue that to the extent that these white-collar crimes are morally blameworthy, the
determination of wrongdoing must be disentangled from the determination of punishment and
imprisonment. Based upon an examination of several recent convictions, this paper argues that
conviction without imprisonment is a second-best alternative to decriminalization in cases where
the conduct is blameworthy, and results in non-consensual harm. This is because the disutility
caused by conviction alone is sufficient to achieve the objectives of criminalization without the
need for imprisonment. Consequential sanctions like shaming and clawing back illegal gains
add to the disutility of conviction. Imposing disbarment orders in lieu of jail terms can satisfy the
incapacitation objective. Adopting this model advances the criminalization debate and results in
a better correlation between the act committed by the corporate fiduciary and the punishment
deserved for it, while yielding significant cost savings for the state.