Tag Archives: Samuel W. Buell

For Those Seeking to Rival the United States at Corporate Criminal Enforcement: What You Should Know About the U.S. System’s Distinctive Roots

by Jennifer Arlen and Samuel W. Buell

The United States leads the rest of the world in successful corporate criminal enforcement actions against large multi-national firms, collecting enormous penalties and occupying center stage in the global enforcement arena. U.S. dominance draws its horsepower from two sources. The first, of course, is an extremely broad and easy-to-apply corporate liability rule, in the form of the respondeat superior doctrine. Under this rule, corporations are liable for all crimes committed by their employees in the scope of employment with some intent to benefit the firm. The second is the power granted to prosecutors to negotiate and settle cases, most often through deferred and non-prosecution agreements (DPAs and NPAs), by agreeing to reduce sanctions and to refrain from seeking conviction of firms that either discover and report crimes by their employees or fully cooperate by providing enforcers with the evidence needed to prove such offenses. Thus was born a system in which private business bears much of the cost of public enforcement, and in which—resource constraints aside—prosecutors are better able to police offenses committed in the uniquely opaque and complex setting of the large business firm.

This now familiar story oversimplifies how the U.S. system has enabled prosecutors to be so successful pursuing criminal cases against large corporations. An additional set of doctrines is vital to the success of the U.S. system of corporate criminal enforcement. Enforcement authorities cannot succeed without the ability to investigate complex corporate crimes by obtaining witness testimony, documents, and data. U.S. prosecutors have benefited greatly from their ability to shift the locus of investigation from the public to the private sector because, in the United States, in contrast to many other countries, a variety of laws—such as those governing self-incrimination, employee rights, legal privileges, and data privacy—enable private investigators to collect, and then provide to the government, evidence that government investigators could not so readily obtain themselves. Continue reading →

Did the UK Supreme Court Make Progress on the Central Dilemma of White-Collar Crime?

by Samuel W. Buell

On October 25, 2017, the United Kingdom Supreme Court issued a fascinating and potentially groundbreaking opinion (PDF: 357 KB), in a civil suit for contract breach called Ivey v. Genting Casinos (UK) Ltd.[1]  As this post will explain, the UK Supreme Court refined a major component of English law of white-collar crime, while purporting to relegate that component to the dustbin.

The central problem in the substantive criminal law of white-collar offenses—an issue I have pursued in much of my scholarship (here, here, here, and here, for example)—is how the law draws lines between seriously morally wrongful business practices and those that are acceptable, even if, in hindsight, regrettably unwelcome.  The perennial challenge is to draw lines that are sufficiently clear to warn potential wrongdoers of criminal sanctions and that mark out only serious wrongdoers for imprisonment, while crafting those lines to be sufficiently broad and flexible to apply, and thus be effective, in an ever accelerating and more complex industrial world. Continue reading →

The Market for Global Anticorruption Enforcement

by Samuel W. Buell

The explosion in Foreign Corrupt Practices (FCPA) enforcement is a turning point for white collar practice to which many discussions on this blog owe their origins. For over two decades the FCPA rested mostly dormant. From 1977, when the statute was enacted, until 2000, the federal government pursued only fifty-two FCPA enforcement actions. No more than five such actions were brought in a single year, and in four of those years, zero actions were commenced. But then, at the beginning of the twenty-first century, U.S. prosecutors and securities enforcers eagerly embraced the statute, initiating 379 FCPA cases between 2001–2015,  reaching an annual high of 56 cases in 2010.[1]

In a new paper in Law & Contemporary Problems, my colleague Rachel Brewster and I offer a broad theoretical accounting for this dramatic development. It is an outside-in, inside-out story, featuring international organizations, policy makers, prosecutors and regulators, and the defense bar as the central characters responsible for awakening the FCPA and creating the robust anti-corruption enforcement regime that exists today. Continue reading →

Managerial Guilt

by Samuel W. Buell

The Justice Department, the defense bar, the academics, the public, and perhaps even the executive suites all agree:  Corporate crime is a management problem.  For abundant evidence that they are right one generally need look back only a few days—for example, to last week’s revelation that, to meet corporate sales targets, thousands of employees at Wells Fargo crammed millions of credit card and other accounts onto customers who didn’t want them.

Only a firm’s managers (by which I mean more than strictly the c-suite) are, after all, in a position to create the positive and negative incentives that will induce employees and other agents to refrain from breaking the law.  Critically in the current American system of corporate criminal liability, only the managers have the authority to negotiate with prosecutors and regulators, including control over the decision whether to report law violations discovered by the firm. Continue reading →