Sen. Elizabeth Warren, a Massachusetts Democrat and presidential hopeful, introduced legislation this week that aims to make it easier to jail chief executives for corporate wrongdoing. (Jose Luis Magana/AP)

In recent months, Sen. Elizabeth Warren has rattled Silicon Valley with a proposal to break up big tech giants like Amazon and floated imposing an annual tax of 2 percent on Americans with a net worth north of $50 million.

But the Massachusetts Democrat, who is running for president, has a new target: CEOs. Warren introduced legislation this week that aims to make it easier to jail the chief executives of big corporations who allow fraud or other forms of corporate wrongdoing to happen on their watch.

Warren has made Wells Fargo the poster child of this proposal. The embattled San Francisco bank has admitted to consumer abuses over the past three years — from opening millions of accounts customers didn’t want to foreclosing on hundreds of borrowers because of a computer error. Wells Fargo has paid more than $1 billion in fines and is looking for its third CEO in as many years, but Warren says that is not enough.

“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,” Warren said in an opinion article for The Washington Post published Tuesday.

Warren’s legislation has little chance of Senate passage and was quickly criticized by business groups and white-collar defense attorneys as criminalizing normal corporate behavior. “Criminal penalties are the most drastic penalties a government can impose. We need to be very careful about how we use that,” said Tom Quaadman, executive vice president of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, a large lobbying group.

There may be faster ways to address the difficulty of prosecuting corporate titans, some defense attorneys said. “A better legislative response would be to give the [Securities and Exchange Commission] the budget it needs to do its job,” said Stephen Crimmins, a former SEC enforcement lawyer who is a partner at Murphy & McGonigle.

Warren supports fully funding the SEC, but that is not enough of a deterrent, said a policy adviser for the candidate who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly. The cost of a financial penalty is simply passed on to shareholders, the aide said. “Corporations don’t make decisions, people do. Decision-making at the biggest corporations won’t change until executives have real skin in the game — not just the threat of fines that they can pass off onto shareholders while still collecting their multimillion-dollar bonuses,” Warren said in a statement.

Warren’s proposal taps into lingering populist frustration with the lack of criminal prosecutions after the global financial crisis. Going after corporate executives has long been difficult, particularly at large companies, former prosecutors say. The investigations are lengthy and expensive, they say, and it can be difficult to prove that a CEO knew about specific corporate wrongdoing in a large organization.

Corporate prosecutions have become even more rare under the Trump administration, said Brandon Garrett, a Duke University law professor who consulted with Warren’s office on her legislation. Fines against corporations have plummeted in the past two years. Corporate executives, including the CEO, face criminal or civil prosecution in less than a third of the cases, Barrett found in the March report “Declining Corporate Prosecutions.”

Warren has proposed two pieces of legislation. Under the Corporate Executive Accountability Act, executives at companies with more than $1 billion in revenue who are found guilty of negligence could face criminal prosecution in addition to civil penalties. Under the legislation, they would spend as long as a year in jail for the first violation and three years for the second.

Criminalizing negligence would upend precedent, legal experts say. In most cases, defendants must know they are committing a crime to be found guilty, said Peter Baldwin, a former federal prosecutor and a partner at Drinker Biddle. Being found negligent is a much lower standard and is traditionally pursued through civil courts, he said.

“I understand the gut reaction of most people in the United States who say we want to hold these banks and executives responsible for the problems that occurred in our economy. But do we want to change the standards of our criminal law to do that?” Baldwin said.

This is already the standard used in many cases, including with violations of the Clean Air Act, the Warren aide said. “My proposal builds on existing laws that impose criminal liability on negligent executives in certain areas,” Warren said in the opinion article published in The Post.

Under another bill, the Ending Too Big To Jail Act, Warren would create a corporate crime strike force using the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP. The office, which was established to monitor the $700 billion taxpayer bailout effort following the financial crisis, has successfully prosecuted dozens of executives of small to midsize banks. But SIGTARP officials have acknowledged struggling to go after the leadership of big financial institutions and asked Congress to change the law.

Warren’s legislation adopts parts of SIGTARP’s proposal, including requiring top executives of a company with at least $10 billion in revenue to certify every year that they have conducted “due diligence” to identify criminal or civil fraud. That extra step could make it easier for law enforcement to hold those executives criminally responsible for corporate wrongdoing even if they are not personally responsible or aware of the bad behavior, legal experts say.

SIGTARP would be remade into the Special Inspector General for Financial Institution Crime and be given broader jurisdiction under the legislation.

Creating a dedicated investigative unit would allow prosecutors to specialize in corporate cases, but such an office would need to be fully funded, said Garrett of Duke University. “You have these giant cases involving massive companies and one prosecutor and one investigator working on it. That is one reason the settlements are so lenient,” he said. “Companies can hire, and do hire, entire law firms to defend themselves.”

The proposal sets up unrealistic expectations, white-collar defense attorneys said. “A corporate executive’s responsibility is to lead, contribute vision and value and promote an ethical corporate culture; it is not to be a deputized investigator,” said Jacob Frenkel, a former SEC enforcement lawyer and ex-prosecutor, who is a partner at Dickinson Wright in Washington.