(Reuters) - Some executives and others convicted of stock fraud could face shorter prison terms under a U.S. commission's proposal to change how white-collar criminals are sentenced.
The U.S. Sentencing Commission on Friday released proposals to amend advisory federal guidelines that would shift the emphasis in calculating a sentence for frauds on the market to financial gains instead of investor losses.
The proposal follows years of criticism by defense lawyers and some judges who say that the guidelines focus too much on financial losses caused by fraud, leading in certain cases to sentences that are too harsh. Judges have discretion to impose any sentence, but are required to consider the guidelines.
In stock fraud cases, losses can be in the hundreds of millions of dollars, contributing to an advisory sentence of life in prison.
Under the commission's proposal, judges in these cases would consider the gains from a fraud, a number defense lawyers say would often be considerably smaller.