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(Corporate) Crime Most Definitely Pays

| Written by David Morris | 1 Comment | Updated on Aug 8, 2012 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/corporate-crime-pays/

The New York Times reports that on August 7 a federal judge approved a settlement between the Justice Department and Morgan Stanley. Here’s the crime. In 2006 Morgan Stanley entered into a complex swap agreement with the New York electricity company KeySpan that gave it a stake in the profits of a competitor, enabling both to push up the price of electricity.

Here’s why crime pays. Total cost to New Yorkers from the price fixing: $300 million. Fees paid to Morgan Stanley for making the swap agreement: $21.6 million. Penalty Morgan Stanley is going to pay because of its crime: $4.8 million. And Morgan Stanley doesn’t have to admit any wrong doing.

There will be no further prosecution.

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About David Morris

David Morris is co-founder of the Institute for Local Self-Reliance and directs its initiative on The Public Good. He is the author of the New City States, Seeing the Light, and three other non-fiction books. His essays on public policy are regularly published by On the Commons, Alternet, Common Dreams and the Huffington Post.

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