Why Can’t A Company Go To Trial?

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3 Responses

  1. Jon May says:

    Michael,

         You are absolutely right. I have been saying for sometime that Arthur Anderson was a unique situation that should not be allowed to intimidate other companies into settling with the government. AA provided a service that was inextricably intertwined with its reputation. AA's customers did not know whether their clients, creditors, bankers, and regulators would be willing to rely upon the representations by an auditor who was itself being prosecuted.   

        There is a significant difference between the calculus that an institution and a human being must engage in before deciding whether to fight criminal charges . An individual may decide to roll the dice and go to trial despite significant evidence of criminal conduct. Sometimes the likely sentence is so high and difference between what the prosecutor has offered and what the person will receive after a trial is so small, there is no downside going to trial. Sometimes the nature of the evidence is such that there is the possibility that it will not be believed by a jury. Cases dependent upon testimony by cooperating witnesses who are not corroborated by physical evidence are often won at trial. 

         With an institution the situation is different. What is the financial cost of a Non or Differed Prosecution Agreement versus the cost of going to trial and being vindicated by a jury? The former can sometimes be much cheaper. But if private civil litigation can't be avoided there may be a significant value to obtaining that acquittal. What is the financial cost of a conviction? Is there a risk of debarment? What impact could it have on civil suits? What will it do to the company's stock price? 

        Obviously, the most important factor in all of these calculations is good judgment. And a dask of luck.

    Jon

  2. MIKE MADIGAN says:

    I SUGGEST THAT THE RECENT TRIALS (ALBEIT MAINLY OF INDIVIDUALS) WHICH HAVE OCCURRED IN THE LAST FEW YEARS, INCLUDING OUR AFRICA STING TRIAL, ARGUE FOR THE PROPOSITION THAT A COMPANY CAN INDEED GO TO TRIAL AND/OR AT LEAST PUT THE GOV'T TO THE TEST THROUGH THE CRUCIBLE OF REAL OPPOSITION AND COME OUT THE OTHER END EITHER WITH A GREAT VERDICT OR A NEGOTIATED SETTLEMENT WHICH IS FAR MORE FAVORABLE TO THE COMPANY THAN THAT OFFERED ORIGINALLY BY THE GOVERNMENT OR RESULTING FROM THE VOLUNTARY DISCLOSURE ROUTE

    THE LAST TIME I CHECKED CORPORATIONS (WHO ARE REALLY REPRESENTING THE RIGHTS OF ITS STOCKHOLDERS) AND INDIVIDUALS BOTH HAVE THE RIGHT IN OUR COUNTRY TO CHALLENGE THE GOV'T ASSERTIONS OF PRESUMED GUILT