Law Commons^™

The Market For Corporate Criminals, Andrew K. Jennings

Faculty Articles

This Article identifies problems and opportunities at the intersection of mergers and acquisitions (M&A) and corporate crime and compliance. In M&A, criminal successor liability is of particular importance, because it is quantitatively less predictable and qualitatively more threatening to buyers than successor liability in tort or contract. Private successor liability requires a buyer to bear bounded economic costs, which can in turn be reallocated to sellers via the contracting process. Criminal successor liability, however, threatens a buyer with non-indemnifiable and potentially ruinous punishment for another firm’s wrongful acts.

This threat may inhibit the marketability of businesses that have criminal exposure, …

Are All Risks Created Equal? Rethinking The Distinction Between Legal And Business Risk In Corporate Law, Adi Libson, Gideon Parchomovsky

All Faculty Scholarship

Should corporate legal risk be treated similarly to corporate business risks? Currently, the law draws a clear-cut distinction between the two sources of risk, permitting the latter type of risk and banning the former. As a result, fiduciaries are shielded from personal liability in the case of business risk and are entirely exposed to civil and criminal liability that arises from legal risk-taking. As corporate law theorists have underscored, the differential treatment of business and legal risk is highly problematic from the perspective of firms and shareholders. To begin with, legal risk cannot be completely averted or eliminated. More importantly, …

Deterrence Theory: Key Findings And Challenges, Alex Raskolnikov

Faculty Scholarship

This chapter reviews the key findings of the optimal deterrence theory and discusses the remaining challenges. Some of these challenges reflect current modeling choices and limitations. These include the treatment of the offender’s gains in the social welfare function; the design of the damages multiplier in a realistic, multi-period framework; the effects of different types of uncertainty on behavior; and the study of optional, imperfectly enforced, threshold-based regimes – that is, regimes that reflect the most common real-world regulatory setting. Other challenges arise because several key regulatory features and enforcement outcomes are inconsistent with the deterrence theory’s predictions and prescriptions. …

Complex Compliance Investigations, Veronica Root Martinez

Faculty Scholarship

Whether it is a financial institution like Wells Fargo, an automotive company like General Motors, a transportation company like Uber, or a religious organization like the Catholic Church, failing to properly prevent, detect, investigate, and remediate misconduct within an organization’s ranks can have devastating results. The importance of the compliance function is accepted within corporations, but the reality is that all types of organizations—private or public—must ensure their members com­ply with legal and regulatory mandates, industry standards, and internal norms and expectations. They must police thousands of members’ compli­ance with hundreds of laws. And when compliance failures occur at these …

More Meaningful Ethics, Veronica Root Martinez

Faculty Scholarship

Firms have exponentially increased their investment in the creation and implementation of ethics and compliance programs over the past fifteen years. The convergence of more robust corporate enforcement actions and more sophisticated industry standards and practices surrounding compliance efforts has created a booming compliance industry with commonly accepted standards and responsibilities. Within these efforts is a formal acknowledgment by the government, industry leaders, and academics that ethics has a role to play in helping to prevent misconduct within firms and that compliance without concern for ethics is insufficient. The reality, however, is that within firms’ efforts to implement effective ethics …

Management-Based Regulation, Cary Coglianese, Shana M. Starobin

All Faculty Scholarship

Environmental regulators have embraced management-based regulation as a flexible instrument for addressing a range of important problems often poorly addressed by other types of regulations. Under management-based regulation, regulated firms must engage in management-related activities oriented toward addressing targeted problems—such as planning and analysis to mitigate risk and the implementation of internal management systems geared towards continuous improvement. In contrast with more restrictive forms of regulation which can impose one-size-fits-all solutions, management-based regulation offers firms greater operational choice about how to solve regulatory problems, leveraging firms’ internal informational advantage to innovate and search for alternative measures to achieve the intended …

The Outsized Influence Of The Fcpa?, Veronica Root Martinez

Faculty Scholarship

The current power and influence of the Foreign Corrupt Practices Act (“FCPA”) is really quite remarkable when one considers the statute was largely ignored for its first twenty-five years of existence. This statute, meant to reign in corruption by United States companies doing business abroad; has generated billions of dollars in revenue for the United States government; prompted the development of law firm practice groups and law school courses; become the subject of numerous scholarly articles; and has, arguably, made anti-bribery efforts the highest of priorities for multinational corporations engaged in robust compliance efforts. Corporations, scholars, and the public would …

The Compliance Process, Veronica Root

Faculty Scholarship

Even as regulators and prosecutors proclaim the importance of effective compliance programs, failures persist. Organizations fail to ensure that they and their agents comply with legal and regulatory requirements, industry practices, and their own internal policies and norms. From the companies that provide our news, to the financial institutions that serve as our bankers, to the corporations that make our cars, compliance programs fail to prevent misconduct each and every day. The causes of these compliance failures are multifaceted and include general enforcement deficiencies, difficulties associated with overseeing compliance programs within complex organizations, and failures to establish a culture of …

Corporate Oversight And Disobedience, Elizabeth Pollman

All Faculty Scholarship

Over a decade has passed since landmark Delaware corporate law decisions on oversight responsibility, and only a small handful of cases have survived a motion to dismiss. Scholars have puzzled over what it means to have the potential for corporate accountability lodged within the duty of good faith, but almost never brought to fruition in terms of trial liability.

This article explores the public-regarding purpose of the obedience and oversight duties in corporate law and provides a descriptive account of how they are applied in practice. The Article argues that the fidelity to external law required by the duty of …

Coordinating Compliance Incentives, Veronica Root

Faculty Scholarship

In today’s regulatory environment, a corporation engaged in wrongdoing can be sure of one thing: regulators will point to an ineffective compliance program as a key cause of institutional misconduct. The explosion in the importance of compliance is unsurprising given the emphasis that governmental actors — from the Department of Justice, to the Securities and Exchange Commission, to even the Commerce Department — place on the need for institutions to adopt “effective compliance programs.” The governmental actors that demand effective compliance programs, however, have narrow scopes of authority. DOJ Fraud handles violations of the Foreign Corrupt Practices Act, while the …

Foreword: Twenty-Eighth Annual Corporate Law Symposium: Rethinking Compliance, Felix B. Chang

Faculty Articles and Other Publications

The University of Cincinnati College of Law devoted its 28th Annual Corporate Law Center Symposium to compliance. It was a timely choice, coinciding not only with an explosion of sector regulation in recent years but also with shifting market realities for legal employment and legal education. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and the Patient Protection and Affordable Care Act are two prominent examples of major legislation that has added—and will continue to add—to compliance obligations for broad swathes of industries. Meanwhile, the financial crisis has spurred profound transformations in legal employment, including cutbacks in entry …

“Oversight Of The False Claims Act” Testimony By Professor Larry D. Thompson Before The U.S. House Of Representatives Judiciary Subcommittee On The Constitution And Civil Justice, Larry D. Thompson

Presentations and Speeches

Sibley Professor in Corporate and Business Law Larry D. Thompson testifies in a U.S. House of Representatives Judiciary Subcommittee on the Constitution and Civil Justice hearing on “Oversight of the False Claims Act.” The purpose of the hearing was to examine the act’s success and seek ways “to prevent, detect and eliminate false claims costing taxpayer dollars, while ensuring fair and just results.”

Behavioral Ethics, Behavioral Compliance, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

The design of an effective legal compliance system for an organization fearing prosecution for white-collar crime or regulatory violations requires skill at predicting human behavior. It is entirely plausible to use the economist’s simplifying assumptions of rational choice and pecuniary self-interest in making these predictions. But the realism of these assumptions has been under attack for decades now, suggesting that we should at least consider more nuanced behavioral possibilities when designing and implementing compliance programs. The label “behavioral compliance” can be attached to the design and management of compliance that draws from this wider range of behavioral predictions about individual …

Consumer Protection In An Era Of Globalization, Cary Coglianese, Adam M. Finkel, David T. Zaring

All Faculty Scholarship

With expanding global trade, the challenge of protecting consumers from unsafe food, pharmaceuticals, and consumer products has grown increasingly salient, necessitating the development of new policy ideas and analysis. This chapter introduces the book, Import Safety: Regulatory Governance in the Global Economy, a multidisciplinary project analyzing import safety problems and an array of innovative solutions to these problems. The challenge of protecting the public from unsafe imports arises from the sheer volume of global trade as well as the complexity of products being traded and the vast number of inputs each product contains. It is further compounded by the …

Operating Under New Laws Pertaining To Mineral Development On Indian Lands, B. Reid Haltom

Public Lands Mineral Leasing: Issues and Directions (Summer Conference, June 10-11)

89 pages.

Contains 8 attachments:

1) Indian Mineral Development Act of 1982, Public Law 97-382 - Dec. 22, 1982.

2) Proposed BIA Regulations, 25 C.F.R. 225 and 211, Federal Register, Vol. 48, No. 134, Tuesday, July 12, 1983.

3) Billings Area Office Procedures.

4) Flow Chart.

5) Oil and Gas Exploration Joint Venture Agreement.

6) Federal Oil and Gas Royalty Management Act of 1982, Public Law 97-451 [H.R. 5121], January 12, 1983.

7) 30 C.F.R., Part 210, 212, 217, 218, 219, 228, 229, 241, 243, Federal Register, Vol. 49, No. 185, Friday, September 21, 1984.

8) 43 C.F.R., Part 3160, …

Agenda: Public Lands Mineral Leasing: Issues And Directions, University Of Colorado Boulder. Natural Resources Law Center

Public Lands Mineral Leasing: Issues and Directions (Summer Conference, June 10-11)

University of Colorado School of Law professor Lawrence J. MacDonnell served as the conference organizer and as a member of the faculty.

Federal leasing programs, especially for oil and gas and coal, have been undergoing important changes in recent years. This conference will provide an overview and an update for those involved in public lands mineral development. Significant new issues also will be addressed.