Legal Commentary

Criminalizing Failure

By Tom Kirkendall

As Larry Ribstein reports, the Enron prosecutorial veterans are already picking up the usual suspects in regard to the Bear Stearns meltdown.

As John Carney observes , do any investors really feel safer as a result of these criminal probes?

Meanwhile, although maybe Bear struck out, but do we really want to deter potentially beneficial risk-taking by criminalizing it when it fails?

And wouldn't it make more sense to allocate the resources spent on criminalizing such risk-taking toward educating investors in trust-based businesses on how to hedge their risk of loss?

Full post as published by Houston's Clear Thinkers on June 17, 2008 (boomark / email).