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Abstract:
The Sarbanes-Oxley Act of 2002 and its enhanced criminal penalties, which increase both the monetary fines and terms of imprisonment, were enacted at least in part to aid the SEC and to fill the perceived enforcement gap in combating corporate fraud. Congress, in so legislating, enlisted a criminal law behavioral model to induce law-abiding corporate behavior. In other words, Congress presumes that people will comply with the law after a conscious evaluation of the risks associated with disobeying the law. Deterrent-based punishments, however, may yield less effective outcomes for corporate fraudsters since some actors do not engage in the requisite cost-benefit assessments before acting. Moreover, even if everyone undertook such an assessment, their subjective beliefs will vary the outcomes. Indeed, a corporate offender's attitude toward risk will differ according to the type of criminal penalties that could be imposed, thereby implicating differing levels of marginal disutility.

This Article analyzes whether this tactic - that of enacting increasingly lengthier prison sentences and imposing higher fines alone - will have the desired effect of deterring potential offenders, and punishing wrongdoers. As will be demonstrated below, reliance on the Act's enhanced criminal penalties to deter wrongdoing may not yield the desired result in light of the many uncontrollable factors that may undermine both the imposition of lengthy sentences and higher fines, and the impact of such penalties on convicted wrongdoers. Consequently, the punishment prong of the costs-benefits analysis must fully extinguish all benefits of the unlawful act in order to fill in the gaps that arise from a sole reliance on deterrent-based punishment. The asset forfeiture sanction effectively removes the economic motive for the criminal conduct from the potential offender's 'benefits' calculation. Any purported benefit from the criminal scheme will be wiped out if the offender is caught. This sanction which removes the economic incentive for the fraudulent scheme also punishes those individuals who either engage in a faulty cost-benefit analysis, or who fail to engage in such an analysis altogether.

sarbanes-oxley, white-collar crime, criminal procedure, federal criminal law, asset forfeiture, corporate culture, business ethics, criminal penalities, securities fraud

Abstract:
This article addresses whether the SEC's adoption of the final Part 205 Rules as mandated by section 307 of the Sarbanes-Oxley Act will significantly alter the client-fraud terrain. In particular, the article focuses on the potential impact of the SEC's final Part 205 Rules on in-house counsel; specifically analyzing whether such rules provide guidance to, or act as an impediment for subordinate in-house counsel. In part I of this article, I describe and analyze the up-the-ladder reporting obligations of securities lawyers under the Part 205 Rules and under the ABA's Model Rules of Professional Conduct. Part II of this article examines whether the SEC (and by extension, Congress) correctly understood the role of in-house counsel at publicly-traded companies when it promulgated the Part 205 Rules in response to its congressional mandate. It explores whether in-house lawyers generally, and subordinate in-house counsel in particular actually have the ability to effect change within the corporation, or whether, in fact, some subordinate in-house counsel are being set up to fail. By implication, part II asks whether it is realistic to conclude (taking into account the distinction between the general counsel, and the other in-house lawyers) that all in-house counsel generally perform their tasks in the same way, or that all in-house counsel should be held to the same compliance expectations.

Finally, part III of this article focuses on the impact of the final Part 205 Rules on subordinate in-house counsel—particularly those who are under the direct supervision of the general counsel. I argue that, considering the reality of the subordinate in-house counsel's experience, level of authority within the organization, general inability to effect change within the corporate entity, and fear of reprisals, many may seek to avoid making even the initial up-the-ladder report required under section 205.3(b)(1) of the final Part 205 Rules. Indeed, they will be assisted in reaching this conclusion by virtue of the extremely unworkable and complicated triggering standard adopted by the Commission as part of the final Part 205 Rules. It is apparent that the more that the SEC demands of in-house counsel, the greater the potential liability of subordinate in-house counsel, and the greater the cost to corporate owners for any failures. The desired deterrent effect of the Part 205 Rules can be realized only by revising the convoluted section 205.2(e) triggering standard, and by providing the safe harbor protection of section 205.5(c) to all subordinate in-house counsel.

general counsel, in-house counsel, sarbanes-oxley, model rules of professional conduct, MRPC, SEC, securities exchange commission, corporale scandal

Abstract:
In its effort to combat rising lawlessness in decades past, Congress enacted enhanced criminal penalties that included not only increased prison sentences and fines, but also asset forfeiture provisions. Asset forfeiture reaches the spoils of the wrongdoer's illegal conduct, and strikes at the heart of the criminal's economic motive for misusing his corporate status. The failure to include this additional penalty in the Sarbanes-Oxley Act's criminal measures effectively allows the corporate fraudster to escape exposure to a tried and true method of punishment.

This article re-introduces the white-collar criminal and highlights the government's responses to previous instances of wrongdoing by way of background in Part I. The Act's resulting criminal measures are analyzed in Parts III and IV of the article. Part V examines the proposed asset forfeiture sanction, while Part VI makes the case for the application of the asset forfeiture sanction to these particular white collar criminals. Finally, in Part VII, I explain how asset forfeiture can be obtained should Congress fail to enact specific forfeiture legislation directed towards the newly-enacted securities fraud crime.

sarbanes-oxley, white-collar crime, criminal procedure, federal criminal law, asset forfeiture, corporate culture, business ethics, criminal penalities, securities fraud

Abstract:
There were 40,018 law graduates in the class of 2004, of which almost half were women. Many of these women, equipped with exceptional educational credentials, predictably have high hopes of ascending to the upper hierarchy of law practice. Unfortunately, their hopes of obtaining the fabled "corner office" may be dashed when they note who actually practices at the highest levels in those law firms and corporations. Indeed, by the end of 2004, women lawyers would only account for seventeen percent of law partners at the nation's major law firms and fourteen percent of the Fortune 500 general counsel.

This article focuses on the under-representation of women lawyers practicing in the upper levels of Fortune 500 corporations. Because law firm partners and senior associates are essential participants in any corporation's applicant pool for senior-level in-house positions, this article also addresses the promotional barriers encountered by women lawyers who practice at major law firms. To that end, Part I of this Article summarizes the reasons for the paucity of senior-level women lawyers at law firms and explains why corporations should be concerned. Part II proffers the beneficial impact of improving gender diversity throughout the upper ranks of corporate legal departments. In Part III, this article examines the assertion that in-house legal practice is better than law firm practice for women lawyers by questioning whether corporate legal departments do, in fact, provide better advancement opportunities, and work-life balance than law firms - particularly in light of the fact that those law firm pathologies have begun creeping in-house in recent years. Finally, Part IV provides solutions that may be implemented to address the limited gender diversity in the upper ranks of law practice at corporations.

corporate governance, gender, diversity, women and the law, women, general counsel, legal employment, groupthink