Author ORCID Identifier

0009-0003-8399-0096

Document Type

Article

Publication Date

2021

Keywords

Clawback, Recidivism prevention, SEC, DOJ, Corporate crime, Settlement practice, Penalties, Corporate compliance

Abstract

Firms sometimes break the law. When they do, a host of government agencies have power to bring enforcement actions against them, which serve to punish past wrongs, compensate victims, disgorge unlawful gains, deter others, and prevent recidivism. Each of these purposes but one—preventing recidivism—is either met or not once the case reaches settlement. Whether recidivism will occur, however, remains uncertain at the time a case is settled. In light of that uncertainty, this Article takes a critical look at how enforcers currently address recidivism prevention—what it dubs the “clawback” approach—under which defendant firms receive penalty credit today in exchange for remedial efforts that, it is hoped, will prevent recidivism tomorrow. This Article examines the incentives and constraints of the two parties—the enforcer and the firm—and concludes that an alternative “follow-up” approach that credits only firms’ demonstrated results would be more effective and efficient at recidivism prevention.

First Page

1569

Publication Title

Duke Law Journal

Comments

Copyright © 2021 Andrew K. Jennings.

Download

Share

COinS