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Liability and Admissions of Wrongdoing in Public Enforcement of Law

Samuel W. Buell

Duke University School of Law

March 7, 2013

University of Cincinnati Law Review, Vol. 81, 2013

Some judges and scholars have questioned the social value of the standard form in which the Securities and Exchange Commission settles its corporate enforcement actions, including the agency’s use of essentially unreviewed consent decrees that include no admission of liability or wrongdoing. This essay for a symposium on SEC enforcement provides an analysis of the deterrent effects of the three main components of settlements in public enforcement of law: liability, admission, and remedy. The conclusions are the following. All three components have beneficial deterrent effects. Cost considerations nonetheless justify some settlements that dispense with liability or admission, or even both. But a practice like the SEC’s of uniformly institutionalizing settlements without admissions, such that the deterrent effects of admissions are never realized, even for bargaining leverage, is not justified. Further, there is reason to believe that some form of judicial review of enforcement settlements would contribute to deterrence. To put the argument another way, the SEC and other agencies engaged in public civil enforcement could learn something from contemplating why the federal criminal justice system strongly disfavors nolo contendere pleas and why a plea bargaining system dominated by nolo pleas would be so undesirable as to be unthinkable.

Number of Pages in PDF File: 19

Keywords: securities regulation, public enforcement, corporate crime, white collar crime

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Date posted: March 13, 2013 ; Last revised: December 22, 2014

Suggested Citation

Buell, Samuel W., Liability and Admissions of Wrongdoing in Public Enforcement of Law (March 7, 2013). University of Cincinnati Law Review, Vol. 81, 2013. Available at SSRN: https://ssrn.com/abstract=2230396

Contact Information

Samuel W. Buell (Contact Author)
Duke University School of Law ( email )
210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7193 (Phone)

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