Rep. Warren wants jail time for CEOs

By Daniel Hale, PhD

Apr 3, 2020, 5:30pm EDT

WASHINGTON--Sen. Elizabeth Warren unveiled a new bill that proposes criminal liability for any corporate executive who engages in "negligent oversight of a company causing severe harm to U.S. families” and proposes the possibility of jail time for executives who fail to protect consumers from certain data breaches.

“For far too long, CEOs of giant corporations that break the law have been able to walk away, while consumers are harmed and left picking up the pieces,” Warren said. Under Warren’s Corporate Executive Accountability Act, leaders of companies can be punished with up to one year in jail under certain conditions. Specifically, criminal prosecution for executives can occur when cybersecurity negligence affects “the health, safety, finances, or personal data of certain U.S citizens.” Warren’s bill would widen criminal liability to include certain “negligent executives” who:

“Are found guilty, plead guilty, or enter into a deferred or non-prosecution agreement for any crime.”
“Are found liable or enter a settlement with any state or federal regulator for the violation of any civil law if that violation affects the health, safety, finances, or personal data of 1% of the population of any state.”
“Are found liable or guilty of a second civil or criminal violation for a different activity while operating under a civil or criminal judgment of any court, a deferred prosecution or non-prosecution agreement, or settlement with any state or Federal agency.”

Executives could face up to a year in jail for a first violation and up to three years for a second violation. In unveiling the bill Wednesday, Warren’s office noted the well-compensated retirement of the CEO from Equifax, which faced a massive cyberattack in 2019.

Warren’s legislation aims to encourage better corporate behavior by making leaders more responsible for a firm’s conduct. “We all agree that any executive who intentionally breaks criminal laws and leaves a trail of smoking guns should face jail time,” Warren wrote. “But right now, they can escape the threat of prosecution so long as no one can prove exactly what they knew, even if they were willfully negligent." she continued.

"If 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."

Ayan View contributes to this story

Rep. Warren Wants Jail Time for CEOs