Legal Commentary

If you're interested in the Dodd-Frank Act, Congress' 2300-page behemoth legislation which is intended to avoid another economic and financial crisis by regulating financial institutions and various aspects of corporate governance, you can find plenty of interesting commentary on the professor blogs today.  The Conglomerate is hosting a "master's forum" devoted to the topic, and Peter Henning has a nice summary up on New York Times' DealBook: White Collar Watch. 

Of interest to me (with many thanks to Peter for pointing it out): Although Dodd-Frank does not create new statutory criminal liablity (Congress already did that last year when it enacted FERA, which is the Fraud Enforcement Recovery Act), the Act does urge the federal Sentencing Commission to review its recommended sentencing ranges for securities and financial fraud to ensure that the ranges properly reflect the full scope of harm caused by such crimes.  In other words, Congress would like the Sentencing Commission to consider increasing the offense levels that correspond to given instances of fraud.  Higher offense levels result in higher recommended sentencing ranges. 

Peter rightly questions whether higher recommended ranges are necessary given the extremely long sentences that judges are already doling out.  No-one needed the Sentencing Guidelines to convince Judge Chin that Bernard Madoff's crime was as horrific and harm-producing as any murderer's.  (Others, however, questioned that analogy  - see Ron Colombo's comment to Jayne Barnard's Conglomerate post from last year).  Moreover, where judges believe lenience is warranted, the fact that the Sentencing Guidelines are recommended means only that judges will start from a higher baseline before finding some reason to depart or vary the sentence downward. 

In any event, none of this is new.  Pursuant to the Sarbanes-Oxley Act, the Sentencing Commission increased the offense levels for fraud, even though it had just revised offense levels to reflect the seriousness of harm caused by fraud.  For an excellent retelling (and criticism) of that episode, you can read this article by Frank Bowman. If you want speculation that one day, Congress will go so far as to enact mandatory minimum statutory sentences for federal white collar crimes, see this article by Stephanos Bibas.  I figure we are (hopefully) at least one crisis away from such an occurrence.  

And in keeping with my previous admiration of law firms that provide free summaries and analysis of complex legislation, here's a link to Mayer Brown's 129-page summary of Dodd-Frank.