On April 3, 2019, Senator (and Democratic Presidential contender) Elizabeth Warren announced proposed legislation—dubbed the “Corporate Executive Accountability Act”—that would effect a dramatic change in white collar criminal law by permitting prosecution of corporate executives for negligent conduct. Under traditional criminal law principles, defendants must typically have at least knowledge with respect to the conduct that constitutes the crime. However, under Senator Warren’s proposed law, executives of large companies could be criminally prosecuted (and fined and/or jailed if convicted) if they are found to have acted negligently in failing to prevent criminal acts committed by the companies they supervise. The bill is unlikely to be enacted, but it nonetheless represents a significant policy indication from a Presidential candidate.
In an op-ed published in The Washington Post in parallel to the bill’s announcement, Senator Warren expressed the view that “[i]t’s time to reform our laws to make sure that corporate executives face jail time for overseeing massive scams.” [1] In her words, the bill would “expand[] criminal liability to any corporate executive who negligently oversees a giant company causing severe harm to U.S. families.” She predicts that “[i]f top executives knew they would be hauled out in handcuffs for failing to reasonably oversee the companies they run, they would have a real incentive to better monitor their operations and snuff out any wrongdoing before it got out of hand.”