Why are corporate fines for shady or illegal business practices so often less than the amount they made by doing those illegal practices? At that point, don’t the fines just become a cost of doing business?
Specifically thinking about Perdue Pharma. PBS article says they made $35billion pushing opioids, but the current court case is only seeking $6billion on fines. Ignoring the Sackler’s immunity request, this is still a net win.
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So to address other fines that aren’t Perdue, since multiple other people have addressed that one.
The fines that the DOJ/SEC levy usually follow a formula: disgorgement of profits, interest, and punitive fines. Disgorgement of profits means exactly that – they calculate how much the bank or whatever business made off of the illegal activity, and take that. They then calculate interest on that profit from whenever it was committed until whenever the judgment is. That interest percentage is the federal short term rate + 3%. And then punitive fines are on top of that.
Most people on reddit don’t know that, and don’t read the press releases. But very often, the fines are expressly in excess of profits because they calculate what the profit was and then add on top of that.
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