I won’t pretend to be very knowledgeable about the Wells Fargo “fake accounts” scandal, but I understand that the CEO was forced out and had to return bonus money. Legally speaking, was the fact this happened on his watch an indication that he was legally guilty of fraud or other crime?
Clearly there are plenty of crimes employees can commit that can’t be considered the fault of senior executives. In these instances there doesn’t seem to be a way for the top execs to know that criminal activity was taking place. But what if the CEO claims he didn’t know, but circumstances are such that any competent CEO should have known? Can he and/or should he be held responsible?
As with so much these days, this relates to Trump. According to this new Republic article the Trump Organization was involved in money laundering activities by the Russian mob.
The usual wording on those statutes is “the person or or should have known the crime existed”. The CEO can’t turn a blind eye and still be ok legally.
Now, obviously a one-off crime (like a teller stealing cash from a deposit) is not something the CEO would be responsible for. But if they put policies in place to not prevent it, or they get reports and ignore it, I believe they can be held liable.
Similarly, if they put into place a legal policy knowing that it is highly likely to have illegal repercussions, they can be held liable for that too.
I’m sure there are nuances and caveats an actual lawyer can flesh out though.
The CEO usually takes all the credit for the good results that he* may have had little to do with and gets a salary consistent with that. He sets the tone. If the Wells Fargo CEO didn’t know of the scams, he almost certainly set the tone that led to them. If he didn’t know, he was incompetent and ought to lose his job and bonuses. The chef runs the kitchen and is responsible for everything that happens there. If he isn’t do that job, shame. I’d have prosecuted them all.
Legally speaking, I haven’t studied this since law school, but attribution to a CEO is very difficult. The primary issue to examine is the purported violation of the applicable law. Most often, particularly in criminal cases, there needs to be an element of intent combined with the wrongful act.
Corporate wrong doing is hard to prove at the CEO level because the actual wrongful action (e.g. signing up bogus accounts, dumping into a river) is done by someone else. Just because a CEO may say something negligent or even reckless (i.e. legal standards of liability with regards to negligence), like “F- those fed bastards, we’re going to dump wherever we feel like and make bogus accounts for as many seniors as we feel like,” may still not amount to personal liability because the law at hand may be one of specific intent and specific language and wreckless speaking may not be covered (however, just as I write this, “bogus account rally language” may be fraudulent, in which case the hypothetical CEO statement I just wrote may be strong evidence of liability).
So, without intent combined with the action the prosecution may feel it’s a waste of resourced. Often the two aren’t correlated at the CEO level, though I’m sure there’s a fact pattern somewhere where the CEO drove the truck (and to complicate things, changed his mind before telling his underling to dump chemicals :))
Public-opinion wise, yes, the buck has to stop somewhere. But, it wouldn’t surprise me if most corporate criminal investigations end up settling for fines and CEO/high level executive early retirement with golden parachute.
The title of this thread and the first two paragraphs don’t relate to Trump. There are no allegations that anyone in his organization or anyone otherwise employed by him engaged in any crimes (at least in the capacity of their employment). What’s being alleged is that people bought or otherwise invested in his properties because they could use them to launder money on their end. That’s not the same thing as a CEO being responsible for the actions of his subordinates.
Depends on the CEO. Some of them have promoted themselves out of active control of the business, letting their second in command take over, while they spend their time going to board meetings for other companies and playing golf.
I would think in a publicly traded company the decisions would fall to the voting shareholders. If they think firing the CEO will make their stock prices rise (or not sink), then that is what they will vote to do.