Corporate Criminal Enforcement in the United States: Using Negotiated Settlements to Turn Potential Corporate Criminals into Corporate Cops

| July 27, 2017 | Compliance and Enforcement for Organizations

Corporate criminal enforcement in the United States differs from other countries in three ways. First, the United States can impose criminal liability on corporations in a broader range of cases than other countries. Second, almost all corporate criminal resolutions involving large firms take the form of negotiated settlements. Third, the United States grants prosecutors both more choices and more discretion when resolving criminal cases: prosecutors can enter into guilty pleas or pre-trial diversion agreements (deferred and non-prosecution agreements). This chapter shows how granting prosecutors discretion to negotiate criminal settlements and use these alternative forms of criminal resolution can help governments deter corporate crime by inducing corporations to self-report and cooperate. It also identifies what features are needed in order for such a regime to promote deterrence. Finally, it identifies problems with the current U.S. approach that other countries considering employing such measures would do well to avoid.

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Arlen, Jennifer, Corporate Criminal Enforcement in the United States: Using Negotiated Settlements to Turn Potential Corporate Criminals into Corporate Cops (April 1, 2017). NYU School of Law, Public Law Research Paper No. 17-12; NYU Law and Economics Research Paper No. 17-09. Available at SSRN: https://ssrn.com/abstract=2951972

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Jennifer H. Arlen

Associate Reporter, Compliance, Risk Management, and Enforcement

Jennifer Arlen, the Norma Z. Paige Professor of Law at NYU Law School, is one of the nation’s leading scholars on corporate liability, specializing in corporate crime, vicarious liability, and securities fraud. She also has written extensively on medical malpractice liability and experimental law and economics. Arlen received her BA in economics from Harvard College and her JD and PhD in economics from New York University. She is co-founder and director of the NYU Program on Corporate Compliance and Enforcement. She also is a co-founder, director, and past president of the Society of Empirical Legal Studies, is a former director of the American Law and Economics Association, serves on the editorial board of the American Law and Economics Review, and chaired the Law and Economics, Remedies, and Torts sections of the Association of American Law Schools.

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