Jamie Olis' sentence reversed

The Fifth Circuit reversed and remanded the sentence of Jamie Olis, a miscarriage of justice that I first wrote about here. Kirkendall, who has covered this from the beginning, and Berman's sentencing blog, have the story.   

The court emphasized that “the district court’s approach to the loss calculation did not take into account the impact of extrinsic factors on Dynegy's stock price decline.” Berman comments that the

Olis court could have simply remanded for resentencing under Booker.  However, the court instead chose to "review the specific sentencing issues that have arisen in this case and provide an analytical framework to aid the district court in resentencing." The Olis court then engages in a thorough discussion of loss calculations (which dictated Olis' long sentence in the district court) to reach the conclusion that "the district court, faced with a 'cook the books' fraud, overemphasized his discretion as factfinder at the expense of economic analysis."  The Fifth Circuit thereafter suggests that "attributing to Olis the entire stock market decline suffered by one large or multiple small shareholders of Dynegy would greatly overstate his personal criminal culpability."

I have written, in Fraud on a Noisy Market, about the problems of proving loss causation in civil securities fraud cases, particularly in the light of evidence of market irrationality.  The problems are compounded in criminal cases. And this is added to the inherent problems of criminally punishing agency costs that I’ve written about often on this blog (see the corporate crime archive).

The Fifth Circuit opinion, which carefully articulated the problems with loss causation, was authored by Edith Jones.  The opinion indicates the talents in business cases Judge Jones would have brought to the Court, as I have written, e.g., here.  Thankfully we get at least some of those qualities in Alito, as I wrote on Sunday.

Comments

[Robert Schwartz]

Maybe if Ginsbur retires soon.

[Robert Schwartz]

Ginsburg.