Will Loss Calculation Continue To Drive Sentencing?
Law360, New York (June 8, 2011, 1:54 PM EDT) -- In securities fraud cases other than insider trading, the amount of loss caused is typically the critical factor in sentencing decisions. As a result, securities fraud convictions for false statements, phony stock and pump-and-dump schemes tend to generate lengthy sentences, which now have the potential of increasing further.
The sentencing guidelines were first established in 1987 to create “short but definite” sentences for various crimes. Reviews of securities fraud guidelines in 2001 and in 2004, as part of Sarbanes-Oxley financial reform, stiffened penalties significantly.