Has the Pendulum Swung Too Far?
Howard H. Chang
Global Economics Group, LLC
David S. Evans
University of Chicago Law School; University College London; Global Economics Group
Regulation, Vol. 30, No. 4, Winter 2007-2008
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, K42Accepted Paper Series
Date posted: February 13, 2008
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