Personhood, Procedure, and the Endurance of Corporate Compliance

Despite its significant role in preventing and deterring wrongdoing, corporate compliance’s long-term prospects remain an open question. How strongly does a company’s inclination to redress wrongdoing rest on a credible threat of outside enforcement?

This is one of the questions I tackle in a new book chapter, Personhood, Procedure, and the Endurance of Corporate Compliance. The chapter, which is forthcoming in the Research Handbook on Corporate Purpose and Personhood, begins with a prediction. For a number of reasons, the government may find its constitutional access to corporate information significantly narrowed in the future. I set forth the basis for … Read more

Law Enforcement’s Lochner

When we contemplate the numerous challenges regulators and prosecutors face in identifying and redressing corporate and white-collar crime, constitutional criminal procedure is not usually high on the list. If anything, the constitutional doctrines that apply to the government’s interactions with corporations are decidedly pro-government; with few exceptions, they promote easy access to corporate information.

The aim of my latest article, Law Enforcement’s Lochner, is to explain why and how this ease of access may come under pressure. As I explain in the article, two distinct trends in constitutional jurisprudence threaten to undermine the government’s investigative powers: the U.S. Supreme … Read more

Leniency-for-Compliance in Corporate Crime: Examining Both Sides of the Exchange

For over two decades, the federal government has employed roughly the same approach to corporate crime. Prosecutors promise leniency in exchange for corporations’ commitment to improve the internal structures and systems that ensure their employees’ compliance with law. Over the years, this leniency-for-compliance framework has generated not only a sophisticated and robust compliance industry, but also a proliferation of enforcement policies designed to improve corporate policing and disclosure.

The framework has also generated two sub-fields of scholarship. One examines the dynamics of corporate enforcement, whereas the other studies the corporation’s compliance function. Two recent papers of mine seek to further … Read more

Insider Trading’s Legality Problem

Last year, when the Supreme Court revisited the topic of insider trading in Salman v. United States, scholars rehearsed a familiar debate: Should Congress enact a statute that explicitly defines insider trading? Or should it stick with the status quo, wherein the Court periodically clarifies previous holdings in cases such as Dirks, Chiarella, and O’Hagan? Defenders of the status quo argue that a statutory definition would simply encourage traders to find—and leap through—legal loopholes. Critics respond just as robustly that statutory language provides notice and restrains prosecutorial overreach.

In Insider Trading’s Legality Problem, I explore an additional … Read more

When the Corporation Investigates Itself

There may have been a time – say, four or five decades ago – when the internal corporate investigation was viewed with suspicion, if not outright distaste. Today, however, the corporate internal investigation is the norm. Corporations investigate themselves for a host of reasons – to comply with laws and regulations, to garner favor from prosecutors and enforcement agencies, or to demonstrate “good corporate governance” to the company’s various constituents, including its shareholders, consumers, and employees.

Investigations are frequent, run the gamut from small inquiries to massive undertakings, and have fueled a lucrative industry among white-collar attorneys and their respective … Read more

Confronting the Two Faces of Corporate Fraud

The following post comes to us from Miriam H. Baer, Associate Professor at Brooklyn Law School. It is based on her recent paper entitled “Confronting the Two Faces of Corporate Fraud,” which is forthcoming in the Florida Law Review and is available here.

Some people hurt others by failing to follow through on their best-laid plans. Corporate managers who sincerely promise to implement new programs, but then welsh on their promises several months later fall into this category.  These individuals harm society, both by failing to execute their plans, and often by attempting to hide these failures.

Other individuals … Read more