When then-Judge John Gleeson ruled in early 2016 that the public had a right to see a report by an independent monitor on how HBSC was faring since it entered into a controversial five-year deferred prosecution agreement, he noted that he was, after all, not, “to borrow a famous phrase, a potted plant.” His ruling came in a case filed by Hubert Dean Moore, an HSBC mortgage customer from Pennsylvania who wanted to know whether there were still problems at HSBC and asked the court to order disclosure of the 1000-page report. HSBC had and has publicly revealed ongoing and … Read more
Corporate settlements are proliferating in form and function. They include consent decrees, corporate integrity agreements, deferred prosecution agreements, non-prosecution agreements, leniency agreements, and plea bargains. Enforcers at the federal and state level now enter an array of administrative, civil, and criminal resolutions of enforcement actions against companies. Those resolutions may be entered and negotiated in parallel and settled jointly, and their reach is global. Corporate fines have hit new records, with penalties in the hundreds of billions of dollars affecting entire industries and economies. High-profile controversies have erupted over judicial review of government settlements with corporations, as these agreements have … Read more
“And we played the Hustle music. There were, you know, printed materials passed out,” with dance steps so “ideally we could all perform the Hustle in precision,” recalled the former Countrywide first vice president. “There was a lot of excitement. There was a lot of fanfare. It was fun.” He was describing events in the summer of 2007, when Countrywide decide to speed up its process for approving loans, using a program called the “High Speed Swim Lane,” or “HSSL” (or “Hustle”). The music stopped after the global financial crisis. Bank of America bought out the failing Countrywide Financial. In … Read more
“If you only look at the big banks, you will be missing the forest for the trees,” said Hillary Clinton in the debate last night, responding to calls to break up the major banks. Corporate crime is a broader problem touching every industry and not just Wall Street. Clinton has proposed for the first time a top-to-bottom plan for policing and preventing corporate crime and financial misconduct. We have not seen the likes of it in this campaign or elsewhere. The plan addresses systemic risk in financial institutions, or “too big to fail,” but my interest is in “too big … Read more
Earlier this month, federal district Judge Richard J. Leon rejected outright a deferred prosecution agreement with a company, “looking at the DPA in its totality,” and noting that not only were “no individuals . . . being prosecuted for their conduct at issue here” but also “a number of the employees who were directly involved in the transactions are being allowed to remain with the company.” No federal judge has done such a thing before. But Judge Leon’s ruling may only be the beginning, if the practice of charging companies and not individuals continues without real reforms.
A corporate criminal … Read more
The following post comes to us from Brandon L. Garrett, Professor of Law at the University of Virginia School of Law. It is based on his new book, Too Big to Jail: How Prosecutors Compromise with Corporations, which was published by the Harvard University Press this fall. The post originally appeared on the ACS Blog.
Prominent cries of “too big to jail” greeted the decision by federal prosecutors in 2012 not to convict HSBC, the international bank headquartered in London. When HSBC was investigated for violations of international sanctions with countries like Cuba, Iran, Libya, Sudan and Burma, … Read more
Are corporations “persons” with constitutional rights? The Supreme Court has famously avoided addressing the issue head on. In Citizens United, which like no other decision in recent memory elevated the importance of the question whether organizations can assert constitutional rights, the Court did not discuss what a corporation is: whether it is a pure creature of state law, a “real entity” that can exercise all or most of the legal rights of an individual person, or an aggregate entity that helps groups of people realize their interests. Nevertheless, the Court has long recognized that corporations and organizations may litigate rights, … Read more