When a corporation allegedly commits a federal crime, the ensuing investigation often results in an arrangement of some sort (plea, deferred prosecution agreement, etc.) with the corporation, in which the corporation pays a fine. These fines in effect penalize the shareholders at the time of the settlement, not those who were shareholders at the time of the alleged crime. Often, senior executives of the company at the time of the alleged crime don’t get held criminally liable.
“Rules to Spur Executive Charges,” The Wall Street Journal, November 17, 2015 A4. The Department of Justice has changed its guidelines to “‘focus on wrongdoing by individuals from the very beginning of any investigation of corporate misconduct.'” This includes senior executives.
How much impact will this have on the C-suite, or compliance education?
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