US Justice Department says it will try to find Individual Corporate Wrongdoers
The US Justice Department on Wednesday sent a warning to major companies stating that the department will try to find out individual corporate wrongdoers and will not just blame the company.
The government has been earlier criticized for making deals with larger banks and companies, where they agreed to pay huge fines, but very less corporate executives were charged criminally.
US Attorney General Eric Holder's speech at the New York University School of Law focused on financial fraud cases. He said that wherever misconduct happens with a company it is very important to identify the decision-makers at the company who ought to be held responsible for the deed.
Holder said that laws should be modified in such cases and no executive at the top level of an institution should enjoy as he/she is actually not blamed for the fraud. He said such activities will not be tolerated any more.
Although Holder did not mention the name of General Motors Co., he is conducting investigation into the automaker over the issue of delay in recalling 2.6 million cars with defective ignition switches, which has been a reason for causing 19 deaths.
However, the Justice Department has not publically confirmed the investigation, but General Motors, Transportation Secretary Anthony Foxx and Michigan Attorney General Bill Schuette have confirmed that the department is conducting an investigation into the issue.
It has been reported that an investigation at GM is aided by a grand jury and the FBI. The investigation is majorly looking whether GM and its lawyers misled the National Highway Traffic Safety Administration.
Also in March, the Justice Department imposed a criminal fine of $1.2 billion on Toyota Motor Corp. for a corporate misconduct for which the company was charged with a wire fraud, a felony.
Consumer advocate Ralph Nader said, "Corporations don't break the law - people at the companies do". Therefore, he said that the Justice Department's focus is on companies and not on executives, which is a big problem.
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