Do non-prosecution agreements reduce the collateral impact of criminal sanctions against corporations?

• In Event: White-Collar Crime at 75: Sanctioning

Abstract

Federal prosecutors have increasingly relied on Non-Prosecution Agreements (NPAs) to resolve charges of corporate wrongdoing. One primary rationale for the use of NPAs is that they reduce the collateral damages that may stem from criminal convictions. To date, there is limited research on the use and impact of such agreements, particularly when compared to other possible outcomes. This paper examines the impact of different sanction outcomes, including non-prosecution agreements, on the adverse publicity and stock performance of three similarly sized pharmaceutical companies charged with wrongdoing.

Authors

• Hannarae Lee, Indiana University

• Kip Schlegel, Indiana University