Lisa Nicholson, The Culture of Under-Enforcement: Buried Treasure, Sarbanes-Oxley and the Corporate Pirate

Lisa Nicholson of University Louisville (and currently visiting at Boston College Law School) has posted The Culture of Under-Enforcement: Buried Treasure, Sarbanes-Oxley and the Corporate Pirate on SSRN.  The article, which was recently published in DePaul Business & Commercial Law Journal,  argues for the extension of asset forfeiture remedies to apply to criminal violations of the federal securities laws.  According to Nicholson, asset forfeiture is a necessary supplement to the available remedies for criminal securities fruad, which can help to ensure that securities laws provide adequate levels of deterrence.  Here is the abstract:

In its effort to combat rising lawlessness in decades past, Congress enacted enhanced criminal penalties that included not only increased prison sentences and fines, but also asset forfeiture provisions. Asset forfeiture reaches the spoils of the wrongdoer’s illegal conduct, and strikes at the heart of the criminal’s economic motive for misusing his corporate status. The failure to include this additional penalty in the Sarbanes-Oxley Act’s criminal measures effectively allows the corporate fraudster to escape exposure to a tried and true method of punishment.

This article re-introduces the white-collar criminal and highlights the government’s responses to previous instances of wrongdoing by way of background in Part I. The Act’s resulting criminal measures are analyzed in Parts III and IV of the article. Part V examines the proposed asset forfeiture sanction, while Part VI makes the case for the application of the asset forfeiture sanction to these particular white collar criminals. Finally, in Part VII, I explain how asset forfeiture can be obtained should Congress fail to enact specific forfeiture legislation directed towards the newly-enacted securities fraud crime.


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