Has the Pendulum Swung Too Far?

6 Pages Posted: 13 Feb 2008

See all articles by Howard H. Chang

Howard H. Chang

Global Economics Group, LLC

David S. Evans

Global Economics Group; University College London

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.

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

JEL Classification: K22, K40, K41, K42

Suggested Citation

Chang, Howard H. and Evans, David S., Has the Pendulum Swung Too Far?. Regulation, Vol. 30, No. 4, Winter 2007-2008. Available at SSRN: https://ssrn.com/abstract=1092927

Cato Institute (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
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Howard H. Chang

Global Economics Group, LLC ( email )

140 S. Dearborn, Suite 1000
Chicago, IL 60603
United States
312-533-4602 (Phone)

HOME PAGE: http://www.globaleconomicsgroup.com

David S. Evans

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

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