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Conclusion

Ron Formisano

in American Oligarchy: The Permanent Political Class

America’s oligarchy is creating an aristocracy of inherited wealth.

Introduction

Anthony S. Barkow and Rachel E. Barkow

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

This book explores the debate about the use of criminal law to regulate corporate conduct. More specifically, it considers the power of prosecutors to regulate corporations accused of criminal ... More

This book explores the debate about the use of criminal law to regulate corporate conduct. More specifically, it considers the power of prosecutors to regulate corporations accused of criminal wrongdoing through agreements consisting of nonprosecution agreements (NPAs) and deferred prosecution agreements (DPAs). Also known as settlement agreements, NPAs and DPAs allow companies to avoid indictments so long as they meet the prosecutors' regulatory terms. In many of these agreements, prosecutors impose affirmative obligations on companies to change personnel, revamp their business practices, and adopt new models of corporate governance. This book examines a number of fundamental questions that arise from the practice of corporate regulation by prosecutors, such as how the government should seek to deter corporate misconduct, how to promote good practices in prosecutorial involvement in corporate governance, how to improve coordination and minimize collisions between prosecutors and regulatory agencies, and how much power corporate monitors should have.Less

Deferred Prosecution Agreements on Trial: Lessons from the Law of Unconstitutional Conditions

Richard A. Epstein

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

This chapter examines the appropriate limit of deferred prosecution agreements (DPAs) in light of the serious dangers in using any principle of corporate criminal liability. It begins with an ... More

This chapter examines the appropriate limit of deferred prosecution agreements (DPAs) in light of the serious dangers in using any principle of corporate criminal liability. It begins with an overview of the so-called “grand inversion” and the role that the Holder, Thompson, and McNulty memos played in exploiting this grand inversion against corporations. It then considers how the unconstitutional conditions doctrine should inform the question of what types of terms should be included in DPAs. It also discusses vicarious criminal liability and the corporate criminal prosecution against the now defunct Arthur Andersen and Co. It argues that the existing standard for corporate crime is too broad and that prosecutors exercise too much power over companies. The chapter concludes with a discussion of terms requiring corporations to take certain positions in political debates over questions of social policy.Less

Inside-Out Enforcement

Lisa Kern Griffin

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

This chapter examines the role of private parties in criminal law enforcement of corporations,with particular emphasis on the compliance industry and corporate monitors. More specifically, it ... More

This chapter examines the role of private parties in criminal law enforcement of corporations,with particular emphasis on the compliance industry and corporate monitors. More specifically, it considers the nature of the collaboration between public enforcers and private parties that stems from current corporate enforcement strategies, along with the costs and benefits of those partnerships. It also explores the changing conceptions of public and private interests developing out of the 2008 economic crisis and the bailout of financial institutions. Finally, it discusses the impact of public/private partnerships on corporate crime deterrence and whether deferred prosecution agreements have achieved the advantages of industry-wide corporate regulation or succeeded in inculcating broad norms of compliance.Less

Collaborative Organizational Prosecution

Brandon L. Garrett

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

This chapter examines the relationship between prosecutors and regulators in corporate cases, with particular emphasis on the merits of corporate regulation by prosecution. It first considers the ... More

This chapter examines the relationship between prosecutors and regulators in corporate cases, with particular emphasis on the merits of corporate regulation by prosecution. It first considers the role that regulators are already playing in the formulation of nonprosecution agreements and deferred prosecution agreements before discussing corporate prosecutions and the involvement of regulators in the negotiation of settlements. It then offers suggestions to improve the relationship between prosecutors and federal regulatory agencies and notes how a largely collaborative approach has emerged from the relationship between federal regulators and prosecutors. It also describes the benefits of the complex system of overlapping enforcement authority despite a sometimes tense partnership between prosecutors and regulators.Less

The Prosecutor as Regulatory Agency

Rachel E. Barkow

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

This chapter examines the capacity of both state attorney generals and federal prosecutors to act as regulators based on democratic accountability, institutional competence, and procedural ... More

This chapter examines the capacity of both state attorney generals and federal prosecutors to act as regulators based on democratic accountability, institutional competence, and procedural reliability. It first considers the factors that give prosecutors the ability to assume a regulatory role and goes on to discuss corporate regulation by prosecutors. It then compares prosecutors and traditional regulators in terms of accountability and shows that nonprosecution agreements, deferred prosecution agreements, and settlement agreements often decide complex questions of how businesses should operate. It also asks whether prosecutors can make efficient decisions in the business context and whether regulatory agencies possess greater institutional competence than prosecutors. The chapter concludes by assessing the procedural reliability of prosecutorial regulation.Less

Conclusion

Anthony S. Barkow and Rachel E. Barkow

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

This concluding chapter proposes a comprehensive set of reforms to improve the current system of corporate regulation by prosecutors. Some of these reforms would require fundamental shifts in the way ... More

This concluding chapter proposes a comprehensive set of reforms to improve the current system of corporate regulation by prosecutors. Some of these reforms would require fundamental shifts in the way we currently approach nonprosecution agreements, deferred prosecution agreements, and settlement agreements. These include junking corporate criminal liability, making criminal law enforcement a key part of the regulatory enterprise of risk regulation, increasing the Securities and Exchange Commission's activity in addressing corporate misconduct, and reforming the role of corporate monitors and private actors. This chapter also emphasizes the need more empirical data about the effectiveness of settlement agreements in reducing corporate misconduct, the costs of their use, the availability of alternatives, and the costs and benefits of particular terms within agreements.Less

Removing Prosecutors from the Boardroom: Limiting Prosecutorial Discretion to Impose Structural Reforms

Jennifer Arlen

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

This chapter argues that prosecutors can effectively deter corporate crimes if they are given the combined power to prosecute firms for their employees' corporate crimes and the power to offer ... More

This chapter argues that prosecutors can effectively deter corporate crimes if they are given the combined power to prosecute firms for their employees' corporate crimes and the power to offer leniency to firms that monitor effectively, report misconduct, and cooperate. It begins with an overview of U.S. practice governing corporate liability and the wisdom of granting prosecutors authority to regulate corporate governance. It then considers the traditional U.S. approach to corporate criminal liability and explains why the Department of Justice had to abandon it in order to adequately deter crime. It also examines how corporate criminal liability evolved to embrace a proactive policy of using nonprosecution to convince corporations to deter crime. It suggests that prosecutors have gone too far in regulating companies and that civil regulatory authorities should exercise the sole authority over mandated corporate governance reforms, including monitoring requirements. Finally, it contends that prosecutors should use prosecution and the threat of prosecution to secure ex post cooperation from firms, instead of nonprosecution agreements or deferred prosecution agreements to induce structural reforms.Less

The Domestic Influence of the OECD Anti-Bribery Convention and the Working Group on Bribery

Cecily Rose

in International Anti-Corruption Norms: Their Creation and Influence on Domestic Legal Systems

Chapter 2 examines the 1997 OECD Anti-Bribery Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related non-binding instruments—the 2009 ... More

Chapter 2 examines the 1997 OECD Anti-Bribery Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related non-binding instruments—the 2009 Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions and the 2010 Good Practice Guidance on Internal Controls, Ethics, and Compliance. It shows how the OECD’s influence on domestic legal systems has been aided rather than hindered by its association with these non-binding instruments. The US Foreign Corrupt Practices Act and UK Bribery Act 2010 both show that the effectiveness of the OECD Anti-Bribery Convention has been enhanced because of its capacity to evolve through these recommendations and guidance. The OECD Working Group on Bribery has also influenced domestic implementation and enforcement of the Convention, though it operates on the basis of peer pressure rather than binding sanctions. The domestic influence of the Working Group has its limitations, however, as demonstrated by its hard fought battle for implementation of the Convention in the United Kingdom.Less

Enforcement

Hugo D. Lodge

in Blackstone’s Guide to The Sanctions and Anti-Money Laundering Act

By way of context, OFSI issues monetary penalties for sanctions breaches, under section 146 of the Policing and Crime Act 2017. This basic mechanism is preserved by the 2018 Act.

Deferred Prosecution Agreements, Nonprosecution Agreements, and Corporate Integrity Agreements

Andrew Boutros

in From Baksheesh to Bribery: Understanding the Global Fight Against Corruption and Graft

Companies—especially publicly traded companies—do not want to go to trial in criminal cases. In fact, they do not want to be indicted at all. Indictment, let alone trial, can have serious ... More

Companies—especially publicly traded companies—do not want to go to trial in criminal cases. In fact, they do not want to be indicted at all. Indictment, let alone trial, can have serious consequences. With the dramatic increase in corporate criminal prosecutions over the last two decades, a fourth option has emerged in the corporate criminal arena: deferred prosecution agreements (DPAs) and nonprosecution agreements (NPAs), which are alternatives to the traditional “guilty” or “not guilty” approach that the law has generally taken to charged crimes. Collectively, these agreements are known as corporate pretrial diversion agreements. Whether the government elects to use one of these agreements depends on multiple factors.Less

Liability and Enforcement

Paul Davies

in Introduction to Company Law

The effective enforcement of law requires that liability be appropriately allocated, that those with the appropriate incentives be in a position to enforce the liabilities thus created and that the ... More

The effective enforcement of law requires that liability be appropriately allocated, that those with the appropriate incentives be in a position to enforce the liabilities thus created and that the sanctions available be effective. Otherwise, the substantive law may be ineffective in practice.This chapter examines these issues in relation to companies and individuals connected to companies in three contexts: civil law (mainly contract and tort), criminal law, and regulatory rules. Although much of the background law is of general application, it applies in a particular way to companies and individuals engaged in corporate activities.Less

Australia

Andrew Boutros

in From Baksheesh to Bribery: Understanding the Global Fight Against Corruption and Graft

Australia’s anti-bribery and anti-corruption laws appear simple in expression but have proved illusive in securing successful prosecutions. The structure of the foreign bribery offense is complicated ... More

Australia’s anti-bribery and anti-corruption laws appear simple in expression but have proved illusive in securing successful prosecutions. The structure of the foreign bribery offense is complicated and requires numerous physical and mental elements to be established for each limb of the offense. Since 1999 when Australia enacted its foreign bribery laws, there have been several corporate and individual guilty pleas in foreign bribery cases but as yet no contested trials. The first case in 2011 arising out of the Securency banknote printing scandal has concluded with mixed results: several plea deals yet other prosecutions permanently stayed due to illegal conduct on the part of the investigative agencies. Other more recent cases have started but are early in the criminal justice system. The traditional approach of the Australian prosecutors is that once charges are laid, they expect a guilty plea to the offense charged or an agreed lesser offenses and then any discount is a matter for the sentencing court. Australia still lacks a structured approach to complex commercial crime including foreign bribery. While there are reforms pending before the Australian government on changes to the foreign bribery offense deferred prosecution agreements, a strict liability corporate offense of failing to prevent foreign bribery, and enhanced private sector whistle-blower laws, they are yet to be implemented. While resources at the Commonwealth level have improved over the years, they remain diffuse, underfunded, and under-resourced. Australian business is starting to adopt a more proactive response to manage offshore risk and the expected legislative reforms are pushing this along. Australian business increasingly knows it must address these issues in a global economy as its most significant trading partners are taking a similarly tough stand against bribery and corruption.Less