Has the Pendulum Swung Too Far?

Abstract:     
The prosecution of corporate fraud has garnered increasing attention in recent years. When guilt is certain, justice is easy. But prosecutors make mistakes in bringing cases - sometimes through carelessness, other times through zealotry - and judges and juries err in finding guilt. We argue that the balance struck by the prosecutorial and judicial system has tipped too far toward pursuing criminal indictments against companies and their executives. The result is harm to the general public, whose members depend on a dynamic, competitive economy for their welfare.

Number of Pages in PDF File: 6

Keywords: corporate crime, corporate fraud, litigation, outcomes, judicial history, prosecution, risk-taking behavoir, civil litigation, corporate governance, regulation

JEL Classification: K22, K40, K41, K42

Accepted Paper Series