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Prosecutors in the Boardroom

Using Criminal Law to Regulate Corporate Conduct

Anthony Barkow, Rachel Barkow

Publication Year: 2011

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

Published by: NYU Press

title page

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pp. vii-viii

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pp. ix-10

This book could not have been completed without the tremendous efforts of many people. The editors would like to thank several in particular. First and most obviously, we must thank the book’s contributing authors. As a compilation, this book is only the sum of its parts. We are fortunate and grateful to have worked with such an incredibly talented ...

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pp. 1-10

The simple account of America’s system of separated powers has legislators responsible for making laws, the executive branch (and prosecutors within it) charged with enforcing the laws, and judges with the power to adjudicate any disputes by declaring what the law commands. Two aspects of our modern government that have disrupted this paradigm—judicial and agency policymaking—have become scholarly obsessions. But there is ...

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1. The Causes of Corporate Crime: An Economic Perspective

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pp. 11-37

This chapter examines the causes of corporate misconduct from an economic perspective, focusing on crime. Our purpose is to provide an understanding of why corporate misconduct occurs and to identify some considerations that are important to enforcement authorities and corporate monitors in determining how best to deter it. These considerations have grown in importance over the past decade, especially with the emergence ...

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

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pp. 38-61

Deferred prosecution agreements are arrangements between prosecutors and potential criminal defendants to impose a provisional cessation of ongoing litigation. Under a DPA, the case is not plea-bargained to a final settlement. Instead, as its name suggests, the DPA only defers the prosecution so long as the defendant complies with the terms of the agreement. Only upon full compliance with its terms will the DPA finally terminate the prosecution. ...

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

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pp. 62-86

Prosecutors in the United States are no longer content to sanction corporations for their employees’ crimes. They also now regularly intervene in corporations’ internal affairs by pressuring firms to adopt structural reforms ostensibly designed to reduce the likelihood of future wrongdoing. Moreover, prosecutors do not restrict their structural reform mandates to corporations ...

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4. Potentially Perverse Effects of Corporate Civil Liability

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pp. 87-109

Careful analysis of incentives dominates the mature academic field of enterprise liability. Vicarious liability rests on the idea that firms can control the conduct of their agents. Assigning liability to firms promises to reduce legal violations by encouraging firms (really managers) to influence agent behavior.1 Remaining arguments in the field center on how optimally to calibrate incentives when attaching liability to firms. For example, in an ...

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5. Inside-Out Enforcement

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pp. 110-131

A distinct regulatory characteristic of corporate fraud cases is the interaction between government agents and private enforcement and the outsourcing of some investigative functions. The increasing use of DPAs between the federal government and corporate defendants provides a key mechanism for regulation by prosecutors. DPAs are hybrids of plea agreements ...

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6. The Institutional Logic of Preventive Crime

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pp. 132-153

Most organized societies promise to punish unjustified violence.1 An assassin wrapping up her latest job seems as deserving of criminal punishment as the underworld boss who hired her or the intoxicated driver who smashes into them. But crime control drives a hard bargain. As police walk their beats, investigators sift through evidence, and prosecutors charge, the ...

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7. Collaborative Organizational Prosecution

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pp. 154-176

This chapter begins a discussion about the merits of “regulation by prosecution” by framing the increasingly close but complex relationship between prosecutors and regulators in corporate cases. The Supreme Court has held that parallel administrative and criminal penalties against the same firm do not raise double jeopardy issues.1 As a result, corporations may face ...

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8. The Prosecutor as Regulatory Agency

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pp. 177-201

We live in an age when prosecutors are a significant source of corporate regulation. The terms of NPAs, DPAs, and state settlement agreements abound with regulations that go far beyond simple commands to companies to stop disobeying the law or to pay for prior violations. These agreements insist on new business models and practices, and they have contained ...

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9. What Are the Rules If Everybody Wants to Play? Multiple Federal and State Prosecutors (Acting) as Regulators

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pp. 202-225

This chapter describes the multiple layers of overlapping jurisdiction involving prosecutors at the federal, state, and local level and explores the issues this multiplicity of actors raises. The federal structure has long created the possibility that the various federal, state, and local actors might all seek to open investigations or bring charges against the same defendants. ...

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10. Reforming the Corporate Monitor?

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pp. 226-248

Over the last decade enforcement authorities have increasingly relied on the appointment of corporate monitors as part of DPAs and NPAs. However, this growth has not been without criticism or controversy. In the last few years a great deal of attention has been focused on the conditions for obtaining a DPA or NPA, how monitors are selected, how they are paid, and what kinds of powers and obligations they have.1 This increased attention has ...

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pp. 249-258

The preceding chapters have shown that the increasingly broad policymaking role of prosecutors in corporate affairs raises a host of complex issues. Indeed, the question of regulation by prosecutors is as complicated as the question of regulation itself. Whether a regulatory regime makes sense requires a careful assessment of its costs and benefits; the same holds true for ...

About the Contributors

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pp. 259-262


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pp. 263-277

E-ISBN-13: 9780814709375
E-ISBN-10: 0814709370
Print-ISBN-13: 9780814787038
Print-ISBN-10: 0814787037

Page Count: 287
Publication Year: 2011

Research Areas


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Subject Headings

  • Corporation law -- United States -- Criminal provisions.
  • Prosecution -- United States.
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