Comment by Kevin P. McCormick
When courts sentence corporate criminal defendants for securities fraud crimes, a single factor is paramount in the analysis. This factor is called “market loss” and it measures the overall loss to investors that has occurred as a result of a misrepresentation or a manipulation of securities. The evolution of federal laws relating to securities fraud and criminal sentencing has elevated market loss to a virtual determinant of criminal culpability for securities fraud crimes. Despite its influence, the market loss factor is complicated and misunderstood. The market loss analysis routinely requires the use of high-priced experts to sift through a sea of numbers and a tangled web of competing formulas and theories. This Comment explores the evolution of the market loss factor in securities fraud sentencing and considers the propriety of its current place in the federal sentencing regime. It also suggests a new model for securities fraud sentencing that may help rein in the drastic and capricious effects that the market loss factor currently imposes on many sentences.
About the Author
Kevin P. McCormick. Law Clerk to the Honorable Samuel Der-Yeghiayan, United States District Court for the Northern District of Illinois. J.D. 2007, Tulane University School of Law; B.A. 2004, University of Notre Dame.
Citation
82 Tul. L. Rev. 1145 (2008)