How Corporate Crime Settlements Play Out Today

Corporate crime settlements are now mostly settled by deferred actions and non-prosecution agreements. What this means is that most corporate violators of law, whether they are a financial institution or energy company will get delayed penalties. Or, instead of having to admit guilt of breaching a law or of fraud, the corporation will simply agree to a set of terms laid out by the government, regulating agencies and or law enforcement agencies. Attorney Sean Hecker of Debevoise & Plimpton gave insight into the issue in an article with Corporate Crime Reporter.

There are several factors that play into why very few corporations admit guilt. The first is that admitting guilt could be a deathblow to the company’s reputation. Companies know that admitting they knowingly behaved in an illegal way could put them out of business. The government knows this too. So this is why there is a sharp increase in non-prosecution agreements and deferred actions against corporate crime settlements.

Today, very few companies will take on government regulators or enforcement agencies in court to fight corporate crime accusations. This is due to a number of factors. Regulators and enforcement agencies overseeing the banking, finance and energy sectors hold greater power than they used to. This is due to fact that the financial collapse was blamed on a lack of government oversight of the finance, banking and mortgage industry. Laws like the Dodd Frank act give regulators much greater power and oversight to prosecute and pursue suspected fraud and violators.

The greater power of the regulators, combined with the potential backlash of a guilty plea is why few companies go to court to fight corporate crime. However, this does not mean that no companies go to court to fight accusations. A few companies have gone to court to fight accusations of crime or fraud and have won. However, this continues to remain rare.

Some experts in the field of law, believe that the current field is not level and that regulators have too much power. Other experts believe that the playing field is becoming fair towards corporations, and that the number of cases going to trial will increase, but only by a small amount.

In the end, both companies and the government have one thing in common. Both want their industries and their workers to play by the rules and be in compliance with regulations. The government does not want companies to go out of business for minor infractions as this leads to the loss of good jobs. The companies don’t want to pay massive fines or risk going out of business for small infractions or a few bad characters within the company. This is why it is expected that deferred and non-prosecution agreements will continue to rule as the major way of settling corporate crime cases.