Month: April 2019

Declining Corporate Prosecutions

A new article, forthcoming in the American Criminal Law Review, develops new data from the last two years of the Duke / UVA Corporate Crime Registry. It is now available on SSRN here. A description of the findings:

Two years into the Trump Administration, newly collected data allows one to assess what impact a series of new policies have had on corporate enforcement.  To provide a snapshot comparison, in its last 20 months, the Obama Administration levied $14.15 billion in total corporate penalties—with 71 financial institutions and 34 public companies prosecuted.  During the Trump Administration, corporate penalties declined.  During its first 20 months, there were $3.4 billion in total penalties, with 17 financial institutions and 13 public companies prosecuted.  These trends build over time—in each year, blockbuster cases come and go, creating swings in fines.  However, consistent with these data, this Article describes changes in written policy, practice, and informal statements from the Department of Justice that have cumulatively softened the federal approach to corporate criminals. 

This figure illustrates the changes in corporate penalties:

Corporate Criminal Penalties, 2001-2018

This Article also describes continuity between administrations.  A rise in corporate declinations, for example, represents a continuation of Obama Administration policy. A decline in use of corporate monitors similarly reflects prior policy. The steady and low level of individual charging in corporate cases, reflects an ongoing lack of success of efforts to prioritize individual prosecutions, exemplified by the 2015 “Yates Memo.”  The figure below illustrates these findings:

Individual Prosecutions Accompanying Deferred and Non-prosecution agreements, 2001-2018

That policy, like others, has now been formally relaxed. This series of DOJ corporate prosecution policy changes have been accompanied by important institutional shifts.  For example, high-level vacancies within the DOJ and other enforcement agencies may compromise ability to coordinate resolution of complex cases.  This Article concludes by proposing structural changes, such as an independent corporate enforcement functions, to enhance capacity and prevent pendulum shifts in the administration of enforcement.  

Ending Too Big to Jail Act

This week, Sen. Elizabeth Warren re-introduced an “Ending Too Big to Jail Act.” Portions of the legislation deal with new resources for corporate criminal investigations at the Department of Justice. For a discussion of the legislation, and my comments on the need for resources to bring highly complex corporate investigations, see this story at Vox. That coverage discusses examples concerning settlements with large corporations post-financial crisis – and we encourage readers to browse this Registry to learn more about such settlements!