The NYU Program on Corporate Compliance and Enforcement’s Conference on Corporate Crime and Financial Misdealing on April 17-18 featured two days of interdisciplinary discussion among law, business, sociology, economics, and psychology scholars, reflecting the wide-ranging roots of the relevant dilemmas. Keynote speakers Leslie Caldwell, assistant attorney general in the US Department of Justice’s Criminal Division, and Judge Jed Rakoff of the US District Court for the Southern District of New York gave attendees an in-depth view of specific issues from their respective vantage points.

Leslie CaldwellDelivering a lunch keynote on the first day of the conference, Caldwell, who oversees nearly 600 attorneys prosecuting federal criminal cases across the country, focused on her priority of increasing transparency about charging decisions in corporate prosecutions. Such a move, she said, benefits both the government and companies.

“If companies know the benefits they are likely to receive from self-reporting or cooperating in the government’s investigation, we believe they will be more likely to come in and disclose wrongdoing and cooperate,” said Caldwell. “And on the flip side, companies can better evaluate the consequences they might face if they do not receive cooperation credit. Transparency also helps to reduce any perceived disparity, in that companies can compare themselves, as best as possible, to other similarly situated companies engaged in similar misconduct.”

Caldwell touched on the Justice Department’s requirements for companies seeking to avoid the direst legal consequences, including her expectations about appropriately conducted internal investigations. Whether a case results in a guilty plea, a non-prosecution agreement, or a deferred prosecution agreement, the Justice Department explains the key factors leading to its decision. Those explanations, she said, will be even more detailed going forward. Caldwell also revealed that she expects more corporate guilty pleas and more declinations in the near future.

Jed RakoffRakoff, giving the dinner keynote that evening, zeroed in on hybrid statutes, which establish both criminal and civil penalties for the same behavior. Such statutes, examples of which include the Sherman Antitrust Act of 1890, the Securities Exchange Act of 1934, and the Racketeer Influenced and Corrupt Organizations (RICO) Act, are inherently problematic, he argued.

While at first glance it might seem logical to give prosecutors maximum opportunity to seek both criminal and civil justice, said Rakoff, “in practice, I suggest, it leads to material inconsistencies and strange results that both undercut its effectiveness and create major legal headaches. The fundamental reason for these problems is that the legal system has long prescribed totally different rules for the interpretation of civil and criminal statutes that often make it impossible for courts to interpret hybrid civil/criminal statutes in a coherent way.”

Rakoff pointed particularly to a well-established principle of United States law calling for narrow interpretation of criminal statutes to avoid over-criminalization, and for civil statutes to enjoy broad interpretation in order to achieve their remedial purpose. Mixing the two, Rakoff suggested, often leaves the court flummoxed, resulting in inconsistent application of the law.

Among the conference participants were NYU Law professors Jennifer Arlen ’86 and Geoffrey Miller, faculty co-directors of the Program on Corporate Compliance and Enforcement, as well as professors Emiliano Catan LLM ’10, Stephen Choi, and Kevin Davis. Panel topics included causes of corporate crime, public and private liability for securities fraud, regulation of foreign public corruption, and private investigation of public wrongs.

Watch the full video of Leslie Caldwell's keynote (47 min):

Watch the full video of Judge Jed Rakoff's keynote (51 min):

Posted April 27, 2015