Two obvious questions dominate the many cases of malfeasance in
corporations and markets that have arrived in the criminal justice
system during the last five years: Was the behavior at issue criminal? If
so, for how long (if it all) should the perpetrators be sent to prison?
Thorough pursuit of either question involves challenging theoretical
inquiries. On the second question (punishment), however, the law
suffers at a facial level from an embarrassment. Extant criminal law has
not come close to working out even the easiest parts of the question of
how to punish financial reporting fraud. The United States legal system
is botching things even as the courts routinely face decisions with grave
consequences: Should the former chief executive officer of a Fortune
500 company, whose shareholders lost hundreds of millions when the
company revealed falsity in its finances, be sent to prison for months,
years, a decade or even life without parole?