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Why Have No High-Level Executives Been Prosecuted in Connection with the Financial Crisis?


May 12, 2014 5:00pm - 7:00pm

Room 290

5:00 - 6:00 pm: Reception in Crocker Garden
6:00 pm - 7:00 pm: Lecture in Room 290, Stanford Law School

In this year’s Marshall Small Lecture, The Honorable Jed S. Rakoff, U.S. District Judge, Southern District of New York, discussed why—in striking contrast with past prosecutions of high-level executives involved in the savings-and-loan crisis in the 1980s and widespread accounting fraud in the 1990s and 2000s—not a single high-level executive has been successfully prosecuted in connection with the recent financial crisis. And with most of the relevant criminal provisions governed by a five-year statute of limitations, it appears likely that none will be. If the financial crisis was simply a result of negligence and inordinate risk-taking, then the criminal law has no role to play in its aftermath. But if it was the result, at least in part, of fraudulent practices to obscure the fundamental weaknesses of dubious mortgages, then the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.

The Morrison & Foerster Lectureship in Law in honor of Marshall L. Small, BA ’49, JD ’51, was established in 2004 through the generosity of Morrison & Foerster LLP.  The lectureship brings distinguished academics, practitioners, jurists, and regulatory officials in the field of law, economics, and business to campus so they may deliver public lectures to Stanford Law School’s faculty, students, alumni, and friends and to participate further in the intellectual life of the law school through those visits. A special emphasis of this lectureship is the area of corporate governance and practice.

Marshall L. Small has been involved for many years in developing best practices in corporate governance. This lectureship honors Mr. Small’s over 50-year career with Morrison & Foerster LLP, where he was a partner from 1961 to 1992 and has been Senior Counsel since 1993. Mr. Small is a member of the American Law Institute and served as a Reporter for the American Law Institute’s Corporate Governance Project from 1982 to its completion in 1993. He is a Fellow of the American Bar Foundation and served as a member of the Committee on Corporate Laws of the Section from 1975 to 1982. As a member and Chair of the Committee’s Subcommittee on Functions and Responsibilities of Directors, he participated in the preparation of the Committee’s original “Corporate Directors’ Guidebook” and “The Overview Committees of the Board of Directors.” Mr. Small also has lectured and written extensively in the fields of corporate and securities law. He received his undergraduate degree from Stanford University and was a member of Phi Beta Kappa. He received his law degree from Stanford Law School, where he served as Notes Editor of the Stanford Law Review and was elected to Order of the Coif. Mr. Small served as Law Clerk to Justice William O. Douglas during the 1951 Term at the U.S. Supreme Court.