Warren's bill would widen criminal liability to include "negligent executives" of corporations with more than $1 billion in annual revenue that have reached certain terms related to alleged wrongdoing. It would cover company leaders who, according to a summary from Warren's office shared with CNBC:
- "Are found guilty, plead guilty, or enter into a deferred or non-prosecution agreement for any crime."
- "Are found liable or enter a settlement with any state or Federal regulator for the violation of any civil law if that violation affects the health, safety, finances, or personal data of 1% of the American population or 1% of the population of any state."
- "Are found liable or guilty of a second civil or criminal violation for a different activity while operating under a civil or criminal judgment of any court, a deferred prosecution or non-prosecution agreement, or settlement with any state or Federal agency."
Executives could face up to a year in jail for a first violation, and up to three years for a second violation.
The legislation has little shot of getting through the GOP-held Senate and could face resistance in the business world. But it comes as Warren has emerged as one of the leading policy voices in a crowded 2020 Democratic presidential primary field that has put an emphasis on populism and working class issues.
It adds to a string of plans that Warren, a longtime Wall Street critic, has put forward to check companies accused of abusing consumers — and the executives who run them. In unveiling the new bill Wednesday, Warren's office in part cited the well-compensated retirements of CEOs from Wells Fargo and Equifax, companies wracked by a fake bank account scandal and a colossal data breach, respectively.
Warren has long lamented a lack of punishment for negligent executives at companies accused of misdeeds, particularly after the 2008 financial crisis. Her legislation aims to encourage better corporate behavior by making leaders more responsible for a firm's conduct.
"We all agree that any executive who intentionally breaks criminal laws and leaves a trail of smoking guns should face jail time," Warren wrote in a Washington Post op-ed published Tuesday night. "But right now, they can escape the threat of prosecution so long as no one can prove exactly what they knew, even if they were willfully negligent."
"If top executives knew they would be hauled out in handcuffs for failing to reasonably oversee the companies they run, they would have a real incentive to better monitor their operations and snuff out any wrongdoing before it got out of hand," she continued.
The existing legislation Warren reintroduced Wednesday, called the Too Big to Jail Act, targets the financial industry more specifically. It would make a special inspector general within the Treasury Department permanent and widen its jurisdiction to include prosecuting financial crimes. The plan would also make executives at banks with $10 billion or more in assets report annually that they have found no criminal wrongdoing or civil fraud within the firm.