Tag Archives: Brandon L. Garrett

Do Heads Roll? An Empirical Analysis of CEO Turnover and Pay When the Corporation is Federally Prosecuted

by Brandon L. Garrett, Nan Li, and Shivaram Rajgopal

A company facing charges will present a “Chicken Little routine” describing the dire consequences of a prosecution for the company, then-U.S. Attorney for the Southern District of New York Preet Bharara famously explained.  Yet typically, after settling the criminal case, “the sky does not fall.”  Instead, Bharara maintained, all too often “the sky brightens,” the firm is seen as having put its problems behind it, and “the CEO even gets a raise.” Other commentators have been skeptical that prosecutions of a company alter behavior of high-level officers such as CEOs. To be sure, sometimes the CEO appears to be affected by a possible prosecution of the company.  The CEO of Wells Fargo recently stepped down before any criminal prosecution was initiated, after civil enforcement and high-profile Congressional hearings brought public attention to bear on unlawful sales tactics the bank used. Perhaps the  culture of not taking responsibility at the top is changing.  Or perhaps cases like that of the Wells Fargo CEO are salient examples only because it is so rare that a CEO is made accountable, in some measure, for corporate crimes. Continue reading

Federal Bank Prosecutions

by Brandon L. Garrett

In a recent piece published in the Yale Law Journal Forum, I describe data collected concerning prosecutions of banks.  I describe how while formerly quite rare, bank prosecutions have increased in numbers and in the size of penalties.  I also analyze the approach of prosecutors and ask whether it is sufficiently effective.  Continue reading

What the Fokker?

by Brandon L. Garrett

The standards for judicial review of corporate settlements have entered a period of ferment.  As Alan Morrison and I have just described in the National Law Journal, the U.S. Court of Appeals for the D.C. Circuit erred in its much-anticipated ruling in Fokker Services, holding that judicial approval of a corporate deferred prosecution agreement should be de rigueur, absent indicia of illegality.  The result may have been correct, given the terms of the deal at issue, but the reasoning was quite overblown and unsupported. Continue reading