A recent New York Times article titled, As Wall St. Polices Itself, Prosecutors Use Softer Approach, (here), argued that federal prosecutors have been going "soft" against Wall Street by increased use of "deferred" or "non-prosecution" agreements. The article misses the point and reflects a simplistic view of criminal prosecutions.
A criminal conviction against a corporation has significant implications. The Arthur Anderson case was the worst case scenario. After it was convicted, the company went out of business and thousands of employees lost their jobs.
The article suggests that deferred prosecution agreements are a lenient punishment. Let's start with the basics. Corporations cannot go to jail -- a profound grasp of the obvious. Corporations have to pay hefty fines. And on top of that -- in many cases -- they are subject to a three-year monitorship along with corporate compliance obligations. All one needs to do is ask some of the corporate, legal and compliance officers about the burdens of a monitorship, the change in corporate culture and the burdens imposed on the company.
In the FCPA arena, we hear a string of complaints about the burdens imposed by the law, the difficulty in complying with the law, and the unfairness of the voluntary disclosure process. Somehow the New York Times missed this important area of white collar enforcement.
In the face of the Wall Street crisis a few years ago, the public and politicians want blood. In response to whatever the immediate crisis is, the public and politicians promote the crime du jour. The New York Times' article reflects that attitude and ignores the reality of corporate prosecutions.
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