PRESENTATIONS next week

1

• PRESENTATIONS next week
• Tues
• Defense Contracting Martin Chu (Northrop
  Grumman) Dean Hansen (Lockheed Martin)
• Fast Food Industry Jennifer Steiner
  (McDonalds) Jennifer White (Chick-Fil-A)
• Broadcast Media/Radio Jennifer Linwood (Radio
  One) Lauren Cohen (Clearchannel)
• Thurs
• Telecommunications Elizabeth Lewis (Verizon)
  Jennifer Phelps (SBC)
• Banking/Financial Services Cherisse Robison
  (Citigroup) Maria Ruiz (JP Morgan)
• Airline Tara Ambalathumkal (Continental)
  Jennifer Popp (American Airlines)
• Cable TV Cynthia Windle (TimeWarner) Elliot
  Manegold (Comcast)
• Corrections?

2

• Agencies as Law Enforcers
• What do you think of the EUs voluntary
  agreement with the PVC industry?
• What purposes do voluntary agreements serve?
• Why might regulators prefer them over
  regulations?
• Why might regulated industry prefer them?
• Are they a good idea, in your view?
• 4. If you were in charge of a regulatory agency
  whose mission is to prevent/minimize company
  activity that could harm the public (as, e.g., at
  the SEC, EPA, FTC, etc.), what mix of enforcement
  tools would you use to accomplish your agencys
  mission?

3

• Regulatory Violations and Enforcement
• Jones, who works for XYZ Corp., is responsible
  for complying with regulations re
• Workplace safety (protection of workers)
• Financial reporting and disclosure (protection of
  investors)
• XYZs product standards (protection of public)
• Storage of toxic substances on site (protection
  of workers and public)
• Suppose Jones fails to do his job properly such
  that the rules are violated. Who is responsible?
  Liable? What kind of liability?

4
(No Transcript)
5

• When should business be civilly liable for acts
  of an employee or agent?
• Business firms as legal persons or
  undertakings
• Principal-agent theory

6

• Noncontractual Civil Liability
• Imputing employee responsibility to business
  vicarious liability and respondeat superior
• Company liability for actions of an employee if
  undertaken within the scope of his/her
  employment
• Scope of employment vs. following orders
• Should employee ever be liable, rather than the
  business, for regulatory violations undertaken
  within the scope of employment?

7

• Criminal Liability
• What is the difference between civil liability
  and criminal liability?
• When is criminal punishment appropriate? Why do
  governments impose criminal punishment for some
  violations and not for others?
• Traditionally, what distinguishes criminal
  wrongdoing from the wrongdoing we punish with
  only civil sanctions.

8

• Criminal Liability
• Actus reus guilty act
• Act or omission
• act ? attempt / conspiracy crimes
• Mens rea guilty mind

9
Morrisette v. U.S. The contention that an
injury can amount to a crime only when inflicted
by intention is universal and persistent in
mature systems of law
10

• What is criminal intent?
• Knowing that what you are doing is illegal?
  Wrong? I know I am supposed to have a permit for
  this gun, but I dont get one.
• Knowingly doing something that the law defines as
  illegal? I bought a gun without getting the
  required permit.

11
Businesses and Criminal Liability

• U.S. v. International Minerals Corp
• What regulatory violation was committed here?
• What must the prosecution prove to convict a
  defendant of a criminal violation of this
  provision?
• What does it mean to knowingly violate a rule,
  regulation or statute?

12
Businesses and Criminal Liability

• U.S. v. International Minerals Corp

• Dissent This case stirs large questions
  questions that go to the moral foundations of
  criminal law. The statute means exactly what
  it says
• It shall be an offense to knowingly sell
  adulterated milk, vs.
• It shall be an offense to knowingly violate the
  regulation (which prohibits sale of adulterated
  milk)
• What is the difference?

13

• What is criminal intent?
• Knowing that what you are doing is illegal?
  Wrong? I know I am supposed to have a permit for
  this gun, but I dont get one.
• Knowingly doing something that the law defines as
  illegal? I bought a gun without getting the
  required permit.
• Defenses to criminal liability are based upon the
  defendants intent
• Insanity justification (self defense)

14
Can businesses be held criminally liable as legal
persons? If so, for whose acts is the
organization responsible? Can businesses have a
guilty state of mind? How? Can businesses be
punished criminally? How?
15
Businesses and Criminal Liability 1. If business
organizations be criminally liable, for whose
acts is the organization responsible?

• Arthur Andersen case partnership (not
  corporation)
• Should entire firm be prosecuted for the criminal
  behavior (i.e., criminal violation of SEC rules)
  of a small subset of partners?
• LLP vs. GP vs. Corporation
• Judges jury instructions
• Is this typical? Were these partners acting on
  behalf of the firm? Would Andersen have been
  criminally prosecuted in other countries?

16
Businesses and Criminal Liability
Hilton Hotels case Co. policy and manager
directed purchasing agent not to participate in
illegal boycott. Court Better rule is strict
vicarious liability because violations (and
individual violator) are hard to determine, and
violations benefit company. Is this typical?
Was this employee acting on behalf of the firm?
Would Hilton have been criminally prosecuted in
other countries?
17

• Businesses and Criminal Liability
• Can individual managers within a business be held
  criminally liable for acts committed by
  subordinates?

U.S. v. Park After first violation, CEO
directed trusted subordinates to fix problem,
but violations persisted. Court CEO had a duty
and the power to prevent further violations, and
it is fair to impose liability on these
responsible corporate officers even if they did
not commit or direct the act in question or have
prior knowledge of it. Misdemeanors only?
18
What can/should managers do to protect themselves
and the company from criminal liability?