a Chair at my law school, or else
Corporate Crime Reporter

In the last two years, despite a host of financial-irregularity cases, no major public corporation – with the exception of Riggs Bank for Bank Secrecy Act violations – appears to have been indicted for involvement in accounting or financial fraud.

The reason: the federal government's new policy is to permit the corporation to enter into a deferred prosecution agreement.

And according to Columbia University Law Professor John Coffee, the increased use of deferred prosecutions in recent years has led to a shift of power to the prosecutors.

“The deeper problem lies in the danger that power corrupts and that prosecutors are starting to possess something close to absolute power,” Coffee warns in a recent article in the National Law Journal.

According to Coffee, the high-water mark for deferred prosecution agreements: the agreement with Bristol Myers Squibb.

The company was charged with “channel stuffing” and other accounting irregularities.

The U.S. Attorney for New Jersey, Christopher Christie, met with the Bristol Myers board and negotiated a deal whereby the company would contribute $300 million to a shareholder compensation fund, separate the positions of the CEO and chairman of the board, nominate an additional outside director acceptable to the
In addition, the company agreed to endow a chair in business ethics at Seton Hall University School of Law – the law school where U.S. Attorney Christie received his law degree.

Coffee says that the Bristol Myers Squibb settlement raises an issue of “prosecutorial accountability.”

“Should a U.S. attorney exploit his leverage over a corporate defendant to compel it to do good deeds, such as creating a chair at the U.S. attorney's law school?” Coffee asks.  for the full story