What is the right punishment for financial fraud?
Bernie Madoff received the maximum sentence for his charges. 150 years. His lieutenant, DiPascali, was denied bail by the judge at his hearing last week, despite an agreement between his lawyer and the prosecutors. He has a maximum sentence of 120 years. They stole billions.
Marc Dreier committed securities fraud, stealing $380 million. He got 20 years.
Du Yimin, conned more than $100 million from investors. She promised them monthly returns of up to 10 percent from investments in beauty parlors, real estate and mining businesses owned by her company. She was put in front of the firing squad.
Si Chaxian conned people out of $24 million. He said they could receive interest of up to 108%. He got the firing squad.
You can probably guess which two fraudsters are from China. The Chinese government puts to death more people than any other country. (Although Iran and Singapore have a higher per capita rate of execution.)
Though usually reserved for violent crimes, death sentences are also applied for nonviolent offenses that involve large sums of money or are seen to threaten social order. China’s highest court said the two frauds had “seriously damaged the country’s financial regulatory order and social stability.”
I guess this is China’s way of instituting reform in the financial markets and preventing fraud. But is it effective? Will be talented people just avoid the financial sector for fear of death?
References:
- Two Chinese Executed for Fraud – BBC News
- Capital punishment in the People’s Republic of China – Wikipedia