Deferred prosecution lets serious corporate wrongdoers buy their way out of liability

Evidence

J.P. Morgan profited from many of the fraudulent transactions that Bernard Madoff conducted through the bank. The bank was charged with failing to report Madoff’s suspicious financial activities to federal authorities, which is a criminal offense (Protess & Silver-Greenberg, 2014b). The Justice Department had to decide whether to pursue a criminal indictment or adjudicate the case in a more lenient way. The officials opted for the prosecutorial settlement known as deferred prosecution, commonly applied in settlements of corporate criminal activities. In this legal procedure, prosecutors dismiss criminal charges in exchange for a fine, various concessions, and a pledge to adopt prescribed corporate reforms. These settlements also grant waivers to offending firms that exempt them from some laws that carry penalties. — Albert Bandura, Moral Disengagement, 1568 (#corroborates, via linked claim)

The bank settled for a deferred prosecution agreement with a $2 billion dollar fine but without having to plead guilty to a criminal charge (Protess & Silver-Greenberg, 2013b). Critics of the settlement objected to the fact that no bank employee was charged with wrongdoing. Commenting on the habitual practice of detaching corporate wrongdoers from their financial wrongdoing, Dennis Kelleher, head of the advocacy group Better Markets, reconnected the detached human agency. “Banks do not commit crimes; bankers do” (Protess & Silver-Greenberg, 2014b). — Albert Bandura, Moral Disengagement, 1571 (#exemplifies, via linked claim)

Categorization

• XREF: connects to: Patent medicine fraud escaped prosecution because laws left buyers to assume the risk — Tim Wu, The Attention Merchants, 109; Government action against a Wall Street firm exposed elite lawyers to fraud liability — Lawrence M. Friedman and Grant M. Hayden, American Law: An Introduction, 1292; Corporations escape criminal liability because wrongdoing is framed as agentless (+7 more)

Broader Connections

• Deferred prosecution lets corporations escape criminal liability with fines and pledges #corroborates (0.98) — Albert Bandura, Moral Disengagement, 1568
• Deferred prosecution agreements let banks pay fines while no person faces charges #exemplifies (0.95) — Albert Bandura, Moral Disengagement, 1571