Consumer Law

The Civil Justice Sheriff May Soon Be Headed to Wall Street

By Andy Hoffman

We?ve talked about how the civil justice system provides a crucial compliment to the criminal justice system before, but today?s lead story in the New York Times has us thinking about it in a slightly different context, so we thought we?d throw in our two cents.

The Times reports about a potential ?surge? of criminal prosecutions in the wake of the Wall Street Meltdown, but points out that the actions may not always succeed.  For one thing, ?recent history suggests that the government?s odds of winning drop when they go after Wall Street executives,? like several of the ?Enron-related prosecutions and some cases brought by Eliot Spitzer when he was New York?s attorney general.?  Then there?s the problem that not all reckless behavior is actually criminal.

So civil cases may actually do a better job holding some of these companies accountable, and certainly do better at helping victims get compensated.  Consider the case of former Worldcom CEO, Bernie Ebbers. In that case, old Bernie (Is it just me, or are corporate shysters disproportionately named ?Bernie??) was sentenced to 25 years in jail after being convicted of fraud in a criminal prosecution.  But it was the shareholders class action suit that provided real relief for victims. That case settled for $54 million, much of it coming directly from WorldCom directors.

While there may be some restitution for victims in criminal cases, the direct benefit to victims in civil cases can be much more substantial.   So for those of you injured by the fraudulent misconduct of Wall Street bad guys, mosey on over to the courthouse and order yourself a tall glass of justice?tell?em ThePopTort ?sheriff? sent you.

Full post as published by ThePopTort on March 12, 2009 (boomark / email).