The most evident problem for law enforcement in investigating and prosecuting corporate crime is that, unlike an individual, a corporate entity has “no soul to be damned, and no body to kick.”1 As a result, prosecutors have to find alternatives short of imprisonment to deter corporate crime. For years, the only alternative was a criminal indictment, which carried significant collateral consequences including monetary penalties and reputational damage. In recent years, the Justice Department frequently has turned instead to another tool in its arsenal against corporate crimedeferred prosecution and non-prosecution agreements, familiarly known as DPAs and NPAs. The efficacy of these agreements and the government’s increased reliance on them has been the subject of ongoing and recent debate.
Increasing Reliance
In the past decade, the total number of corporate DPAs and NPAs entered into by the Justice Department has risen sharply, totaling more than 150 since 2007. In the first part of this year alone, the Justice Department has entered into more than 20 such agreements.2 In late 2010 and 2011, the Securities and Exchange Commission adopted the policy, entering into its first DPA and NPA, indicating its intention “to encourage individuals and companies to provide information about misconduct and assist with an SEC investigation.”3 And last month the United Kingdom announced government plans to promulgate adoption of DPAs for corporate crime based upon the United States model.
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