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May 10, 2011

"Prosecutors in the Boardroom: Using Criminal Law to Regulate Corporate Conduct"

9780814787038_Full The title of this post is the title of this new book edited By Anthony Barkow and Rachel Barkow, which has just been released by NYU Press. Here is a summary of the book's coverage from the NYU Press website:

Who should police corporate misconduct and how should it be policed?  In recent years, the Department of Justice has resolved investigations of dozens of Fortune 500 companies via deferred prosecution agreements and non-prosecution agreements, where, instead of facing criminal charges, these companies become regulated by outside agencies. Increasingly, the threat of prosecution and such prosecution agreements is being used to regulate corporate behavior.  This practice has been sharply criticized on numerous fronts: agreements are too lenient, there is too little oversight of these agreements, and, perhaps most important, the criminal prosecutors doing the regulating aren’t subject to the same checks and balances that civil regulatory agencies are.

Prosecutors in the Boardroom explores the questions raised by this practice by compiling the insights of the leading lights in the field, including criminal law professors who specialize in the field of corporate criminal liability and criminal law, a top economist at the SEC who studies corporate wrongdoing, and a leading expert on the use of monitors in criminal law.  The essays in this volume move beyond criticisms of the practice to closely examine exactly how regulation by prosecutors works.  Broadly, the contributors consider who should police corporate misconduct and how it should be policed, and in conclusion offer a policy blueprint of best practices for federal and state prosecution.

Contributors: Cindy R. Alexander, Jennifer Arlen, Anthony S. Barkow, Rachel E. Barkow, Sara Sun Beale, Samuel W. Buell, Mark A. Cohen, Mariano-Florentino Cuellar, Richard A. Epstein, Brandon L. Garrett, Lisa Kern Griffin, and Vikramaditya Khanna.

May 10, 2011 at 03:26 PM | Permalink

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Comments

Personally, I am troubled by the idea that a corporation can be criminally culpable. People commit crimes. A corporation is just a legal structure, an inanimate object. It is not capable of criminal intent. Only people are.

The case of Arthur Andersen is instructive. They were found guilty of a single criminal count, which effectively terminated the company, putting thousands of innocent employees out of work. The conviction was ultimately thrown out on appeal, but the damage had been done. There was no way to put Humpty Dumpty back together again. Had the government prosecuted the individuals whom it believed had committed crimes, the corporate entity would have survived as an ongoing concern.

Even before the Andersen prosecution, there were only a few large auditing firms, so the loss of one was a real blow to competitiveness in the industry. The remaining audit firms are now effectively un-prosecutable, as there aren’t enough of them left to risk the consequences of bringing another big firm down.

Posted by: Marc Shepherd | May 10, 2011 5:45:27 PM

Without reading this left wing propaganda, I predict, no one is saying the DOJ rampage is itself a criminal enterprise, that should be rigorously resisted, and defendants should seek the personal destruction of every cult criminal attacking our economy, and our American way of life. Most are feminists or male running dogs.

I worked for an agency that was prosecuted this way. I offered, at my own expense, and standing, to resist the injustice and to seek the personal destruction of the local federal prosecutor. The agency had done nothing wrong. This is a vile, incompetent cult criminal allowing serial killers to have their ways, and prosecuting non-profits on billing gotchas.

The agency declined my offer, and entered into a corporate compliance agreement for a markedly reduced fine. After 5 years, the same agency leaders expressed regret they had not taken my offer. If they had completely lost the original case, they would have been better off than going into that compliance agreement. Beyond cost of money and effort, a culture of snitching, and denouncement of one's long term peers and friends became entrenched. No public policy goal was served, nor furthered.

Posted by: Supremacy Claus | May 10, 2011 5:56:40 PM

The defendant does not have a friend in defense counsel. Most are former prosecutors. They are good friends with the current crew. They owe their jobs to the prosecutor not to the defendant. If quit one, you are replaced easily. If you fully deter an office of the prosecutor, they lose their jobs. They will never personally attack the cult criminal. So you need a second legal malpractice lawyer to repeatedly terrorize the defense counsel into getting total e-discovery on the federal thug, and on the judge. File disqualification motions until they can't stand them anymore. Denounce them in the papers. So on.

Posted by: Supremacy Claus | May 10, 2011 6:11:20 PM

hmm

"In recent years, the Department of Justice has resolved investigations of dozens of Fortune 500 companies via deferred prosecution agreements and non-prosecution agreements, where, instead of facing criminal charges, these companies become regulated by outside agencies. Increasingly, the threat of prosecution and such prosecution agreements is being used to regulate corporate behavior."

Or in other words after 50-60 years of overcharging and blackmail of individuals the govt relized they could pull the same illegal crap against corporations and they would also back down and take it insted of saying SEE YOU IN COURT!

Posted by: rodsmith | May 10, 2011 10:23:14 PM

Rodsmith:

You are correct. I was a responsible member of the fastest growing corporation of 1998 when we were taken over. The preceding company was totally innocent (I was there BO) of all allegations but the takeover company aquiesced to the tune of 500 million shareholder dollars, to get over the matter.

I am more CONSERVATIVE THAN YOU!

THINK FOR A CHANGE! Who has the power?

Posted by: albeed | May 10, 2011 11:50:54 PM

Inspired by the perfidy of these Ivy indoctrinated internal lawyer traitors, one of whom may be loyal to another competitor country, the Supremacy has transferred $10,000 to an E-Trade account. Once available, the Supremacy will purchase a share or two of every drug company operating in the US. That will give the Supremacy "standing."

At the next "settlement," the Supremacy will put into practice the tactics discussed. If the Supremacy does not eventually drive out the prosecutor from office, and the judge from the bench, it will eat its hat or worse, make a donation to Yale Law School, something more disgusting and sickening.

Posted by: Supremacy Claus | May 11, 2011 3:02:18 AM

Although, they are immunized by the First Amendment, the Supremacy will give some thought to finding a path to reach legally the authors of this treasonous propaganda. To deter them. These are the intellectuals, the imams, giving sanctions to the legal terrorism now going on. (One path: these lawyers are guideline makers, and not just authors of a book.) It looks like I may have to actually read this trash.

Everyone over 40 should feel physically, personally threatened by these feminists and their male running dogs. They managed to dry up the pipeline of new medications by their all out assaults on brand name medications, and ruinous litigation against pharmaceutical companies. I pray they in turn suffer unspeakable diseases, and get informed, nothing is available to help them. Thank these feminists and their male running dogs for drying up the drug pipeline and for making China the most innovative new drug source.

Posted by: Supremacy Claus | May 11, 2011 3:30:09 AM

Many laws related to business activities are vague, sweeping and complex and therefore easily stretched to fit almost any target of choice. Even mistakes and failures put ordinary business people at risk of being cannibalized by voracious authorities in hot pursuit of headlines and career advancement.

Much of it has the stench of gamesmanship and opportunism about it, as opposed to altruistic concerns about justice and public safety.

Low-hanging fruit, business people who lack the money or clout to effectively fight back, are especially vulnerable. The big guys seldom get mussed.

Take the case of ABN Amro, the Dutch banking conglomerate. At the height of the DOJ's mortgage-fraud crusade, the government portrayed the company as a villain for having jettisoned underwriting processes before bundling potentially shaky loans and dumping them onto the market.

Amro settled with the government for $40 million (drop in the bucket). None of its employees who'd "forged" underwriters' signatures to "thousands" of loan apps or counseled brokers to fudge loan apps so as to conceal potentially disqualifying weaknesses was charged with crimes.

On the other hand, scores of brokers Amro had encouraged to keep the loans coming were mercilessly hammered, basically for having followed Amro's directions. Entire networks of appraisers, title company officers, business lawyers, etc. were imprisoned for years. And guess who the DOJ presented in charging documents as a victim of the networks. ABN Amro.

Posted by: John K | May 11, 2011 9:14:23 AM

"Many laws related to business activities are vague, sweeping and complex and therefore easily stretched to fit almost any target of choice. Even mistakes and failures put ordinary business people at risk of being cannibalized by voracious authorities in hot pursuit of headlines and career advancement.

Much of it has the stench of gamesmanship and opportunism about it, as opposed to altruistic concerns about justice and public safety."

Okay. Let's say that I agree that criminal laws ought to be clear enough that one can order one's primary conduct accordingly, and that, even in a heavily-regulated industry, it's a problem if the laws are sufficiently vague or complicated that criminal liability attaches to behavior that people don't reasonably have to know is wrong or prohibited.

Are you arguing that you'd be happier with no criminal securities-fraud and other business-fraud prosecutions, i.e., the perceived benefits of keeping those headline-hungry prosecutors out of the newspapers is worth the costs?

I don't think you'd want to have your retirement funds invested in a regime where the regulators and prosecutors take your view of the criminal justice and regulatory enforcement process. Maybe I'm wrong.

Posted by: guest | May 11, 2011 9:37:34 PM

"I don't think you'd want to have your retirement funds invested in a regime where the regulators and prosecutors take your view of the criminal justice and regulatory enforcement process."

These Ivy indoctrinated, Hate America feminists protect no one. These prosecutions are pretextual, come after no harm can be proven, and are to dismantle the capitalist system, they have been indoctrinated to hate in their Ivy indoctrination camps. I have proposed the death penalty for any thief taking out more than the economic value of a single human life. So I do no support leniency but greater strictness and oversight. These lawyers are doing no such thing, and no investor should feel safe, because these lawyers look out only for themselves. Investors have to understand they are on their own, and will have to guard against theft in self help, and by bringing street justice to self-dealing executives, actually protected by these lawyers.

Right now, the government is a wholly owned subsidiary of the criminal cult enterprise that is the lawyer profession. It is in utter failure save for the generation of rent for the lawyer. It does nothing right except collect the rent at the point of a gun. They have Draconian measures for legitimate entities making tiny mistakes, and do nothing about Russian mobs stealing from Medicare, by the $billions. These coffee drinking, lazy, slow shuffling, government workers are worthless.

Posted by: Supremacy Claus | May 11, 2011 10:15:17 PM

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