Blocking the Ax: Shielding Corporate Counsel from Retaliation as an Alternative to White Collar Hypercriminalization

52 Pages Posted: 25 Feb 2013 Last revised: 31 Jan 2015

See all articles by Eric Alden

Eric Alden

Northern Kentucky University, Chase College of Law

Date Written: January 30, 2015

Abstract

Public company corporate and securities counsel should be protected from retaliation by senior business officers by requiring that the selection, compensation and, most importantly, termination of such counsel be approved in advance by the corporation’s independent audit committee. The objective of this proposed reform is to use structural checks and balances to reduce the tremendous real world pressures to collude or acquiesce in the commission of white collar crime.

Reform of this type has already been implemented to protect outside auditors of public companies against pressure from corporate officers. Counsel responsible for corporate transactional structuring and securities law disclosures constitute the other critical professional watchdog over public company legal compliance. By shielding these gatekeepers more effectively from retaliatory termination, the proposed reform seeks to improve prophylaxis against sophisticated corporate fraud and the resultant harm that arises therefrom. Checks and balances in the corporate governance structure provide an alternative path to ever greater reliance on ever harsher white collar criminal penalties which our society has followed in recent years.

To translate theoretical discussion into practical implementation, this article proposes the specific text of potential amendments to the NYSE and Nasdaq corporate governance listing standards to effect the reform suggested here.

Keywords: corporate fraud, white collar crime, retaliatory termination, protecting corporate counsel, corporate governance, white collar hypercriminalization, public company audit committees, NYSE and Nasdaq listing requirements

Suggested Citation

Alden, Eric, Blocking the Ax: Shielding Corporate Counsel from Retaliation as an Alternative to White Collar Hypercriminalization (January 30, 2015). Available at SSRN: https://ssrn.com/abstract=2223253 or http://dx.doi.org/10.2139/ssrn.2223253

Eric Alden (Contact Author)

Northern Kentucky University, Chase College of Law ( email )

Nunn Hall
Highland Heights, KY 41099
United States
859-572-5520 (Phone)

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