Why It Is Getting Harder to Prosecute Executives for Corporate Misconduct

The era of large corporate penalties certainly looks to be over, and it is an open question whether we will continue to see companies pleading guilty or settling cases with deferred prosecution agreements. The notion of not imposing costs on “innocent” shareholders has taken hold, so the large fines extracted from banks in the wake of the financial crisis and manipulation of benchmarks like LIBOR are likely a relic of a bygone era.

Whether that is good or bad is a different question, and there are reasonable arguments that corporate criminal liability is a poor way to regulate business behavior. … Read more