US Department of Justice (Speech at Yale): ”Individual Accountability for Antitrust Crimes”

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”………….Last year, the Antitrust Division obtained over $2.5 billion in criminal fines from financial firms prosecuted for antitrust violations in the foreign-currency exchange spot market. Although the fines imposed in that investigation were the largest ever obtained by the Division, we have obtained substantial fines in other investigations. Our automobile parts, air transportation, and LCD investigations, which collectively resulted in more than $5 billion in fines, are just a few examples. Foreign competition enforcers, such as the Directorate General for Competition in Europe and the Council for Economic Defense in Brazil, have also imposed very large fines for cartel violations.

Such fines have occasionally sparked a debate about whether corporate accountability and corporate fines are a meaningful punishment for antitrust crimes. For instance, I participated in a panel discussion on this topic at the Bundeskartellamt’s Berlin Conference last year. During the discussion, a panelist provocatively suggested that competition enforcers are “drunk on fines” and suggested that corporate fines are not serving their intended deterrent purpose.

While I won’t offer an opinion on the buzz-worthiness of corporate fines for my fellow enforcers, I will say that corporate prosecutions and fines have their place in our enforcement toolkit. They punish firms that are in business to make money by taking money away from them. Fines divest corporate offenders of at least some of the ill-gotten gains that they would otherwise enjoy—gains from conduct that undermines the competition on which we should be able to depend. And, word of corporate prosecutions and big fines travels fast, showing there is a real cost to the bottom line from bad behavior. That promotes deterrence.

Corporate accountability is important as well because it incentivizes compliance with our laws. The Antitrust Division emphasizes that compliance with antitrust laws must be ingrained in a corporation’s culture—one that is established from the top down.1 And we insist on probation and corporate monitors in criminal resolutions, where corporate offenders fail to demonstrate serious compliance efforts. Those efforts must include responsible action regarding culpable executives and employees who have not accepted responsibility for their conduct.

As the Antitrust Division’s Assistant Attorney General, Bill Baer, explained in a September 2014 speech: “It is hard to imagine how companies can foster a corporate culture of compliance if they still employ individuals in positions with senior management and pricing responsibilities who have refused to accept responsibility for their crimes and who the companies know to be culpable.”2

This brings me to the point that I want to emphasize during my remarks here today. Holding companies accountable and assessing large fines, alone, are not the only means, or even the most effective way, to accomplish our goal of deterring and ending cartels. Individuals commit the crimes for which corporate offenders pay. Every corporate crime involves individual wrongdoing. As the Deputy Attorney General of the Department of Justice Sally Yates has said, “[I]t is our obligation at the Justice Department to ensure that we are holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the boardroom. In the white-collar context, that means pursuing not just corporate entities, but also the individuals through which these corporations act.”3

Recently, Deputy Attorney General Yates issued a memo entitled, “Individual Accountability for Corporate Wrongdoing,”4 in which she emphasized this principle. “One of the most effective ways to combat corporate misconduct,” she said, “is by seeking accountability from the individuals who perpetrated the wrongdoing.”5

Her memo stressed the importance of individual accountability for deterring future illegal activity, incentivizing changes in corporate behavior, ensuring that the proper parties are held responsible for their actions, and promoting the public’s confidence in our justice system.6

The memo specified measures that all components of the Department must employ to strengthen our pursuit of the individuals responsible for corporate wrongdoing.7

This emphasis on individual accountability is fundamental to Antitrust Division prosecutors. The Division has long touted prison time for individuals as the single most effective deterrent to the “temptation to cheat the system and profit from collusion.”8 My predecessors ensured that this message was often repeated.9 To quote just one of them, Scott Hammond said…………….”

Read Full Speech in pdf:

Source: US Department of Justice


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