‘Too scared to prosecute and too scared to jail?’ A critical and comparative analysis of enforcement of financial crime legislation against corporations in the United States of America and the United Kingdom

Ryder, Nicholas

Abstract

This paper has two aims. Firstly, it critically considers the responses towards tackling corporate financial crime in the United States of America (US). Secondly, it analyses the United Kingdom’s (UK) efforts to tackle corporate financial crime and then compares them with the US. The US presents an interesting case study for this paper due to its robust and aggressive stances towards tackling financial crime and also because it is one of the largest financial markets. Similarly, the UK has adopted a strong stance towards tackling financial crime and is also regarded as one of the most important global financial centres. Therefore, by comparing the two contrasting approaches towards corporate financial crime is it hoped that the best practices from each country could be adopted. The first section of the paper concentrates on the judicial response towards corporate financial crime in the US and it then moves onto highlight and critique the decision of the US Department of Justice (DoJ) to alter its enforcement policy by moving away from indicting corporations to using Deferred Prosecution Agreements (DPAs). Here, the continued use of DPAs is questioned because they have had a limited impact on the future conduct of corporations who are persistent reoffenders. The paper sets out a wide range of arguments for why DPAs should not be the enforcement weapon of choice for the DoJ. The final part of this section critiques the ability of law enforcement and financial regulatory agencies to impose financial penalties and bring civil actions for a wide range of financial crimes under the Financial Institutions Reform, Recovery and Enforcement Act 1989. The second part of the paper concentrates on the UK and concisely assesses the doctrine of corporate criminal liability, thus identifying the contrasting judicial approaches with the US. The next section discusses the use of DPAs for breaches of the Bribery Act 2010 by the Serious Fraud Office (SFO). The section advocates that in the UK DPAs must be utilised for a broader range of financial crime offences, thus drawing on the US model. The penultimate segment of the paper identifies and comments on several alternative enforcement measures which could be used to counteract the limitations of the doctrine of corporate criminal responsibility in financial crime cases. This distinctively includes the Financial Conduct Authorities (FCA) Senior Managers and Certification Regime (SMCR), its ability to impose financial penalties and to revoke the authorization of a regulated corporation. The paper concludes by making a number of recommendations and suggested reforms, thus further developing the scope of this research.

• Journal Article Type: Article
• Acceptance Date: Feb 26, 2018
• Online Publication Date: Jun 25, 2018
• Publication Date: Jun 1, 2018
• Deposit Date: Feb 27, 2018
• Publicly Available Date: Feb 27, 2018
• Journal: Journal of Criminal Law
• Print ISSN: 0022-0183
• Electronic ISSN: 1740-5580
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 82
• Issue: 3
• Pages: 215-233
• Keywords: corporations, financial crime, United States of America, United Kingdom, deferred prosecution agreements
• Public URL: https://uwe-repository.worktribe.com/output/867254
• Publisher URL: http://journals.sagepub.com/home/clj
• Additional Information: Additional Information : © 2018. Reprinted by permission of SAGE Publications
• Contract Date: Feb 27, 2018