Dirt Diggers Digest -Some corporate critics have argued that the only way to deter
egregious misconduct by companies may be to give prosecutors the option to seek
the “death penalty”—revocation of the firm’s charter and the closing of the
business.
Ever since the dismantling of Arthur Andersen after its
conviction on criminal charges relating to its auditing of Enron, prosecutors
at the federal level have avoided seeking that harsh remedy. In fact, they moved
sharply in the other direction by adopting dubious arrangements known as
deferred prosecution and non-prosecution agreements that allow companies essentially
to buy their way out of criminal jeopardy. A recent report
from Public Citizen found that these arrangements have been a failure in
deterring corporate wrongdoing.
Yet what has received less attention is the fact that the
corporate death penalty is alive and well at the state level. Numerous state
AGs have been using this method to deal with those firms considered
unredeemable bad actors.
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