DEFERRED PROSECUTION AGREEMENTS: PROSECUTORIAL BALANCE IN TIMES OF ECONOMIC MELTDOWN

Sharon Oded, UC Berkeley, Visiting Scholar

Abstract

At times when the American economy faces enormous challenges, traditional prosecutorial measures that involve high public spending and immense collateral risks may hamper economic recovery. Economic meltdowns, such as the one we have been experiencing in recent years, call for a refreshment of the prosecutorial toolkit aimed at controlling corporate misconduct. This paper discusses the newly emerged enforcement mechanism, Deferred Prosecution Agreements (DPAs), in light of the current national goal of economic recovery. It portrays the evolution of DPAs and the stimulus for its expansion that followed recent Corporate America scandals. Based on the evaluation of the major promises and pitfalls of DPAs, it is suggested that subject to some policy adjustments, an expanded use of DPAs as an alternative for traditional prosecutorial measures may coincide with economic recovery goals.