Henning on the White Collar Watch at the New York Times
24 Corporate Crime Reporter 6, February 7, 2010

Peter Henning is a professor of law at Wayne State Law School in Detroit.

He teaches courses in white collar crime, corporate law, and professional ethics – among others.

But just recently, Henning started to blog at the New York Times.

He calls it – White Collar Watch.

And he’s raising questions that the white collar world would prefer not to hear.

Like – do deferred and non prosecution agreements do any good?

Or are they just a means for corporations to buy their way out of potential liability?


We asked Henning last week to answer his own question.

“Certainly deferred and non prosecution agreements have become almost the accepted norm now,” Henning told Corporate Crime Reporter. “Indeed, there is even an expectation that companies will receive them.”

“Sometimes I worry – from the government’s side – whether they are looking at this as – here is how we get out of the case. We know they will accept one of these. Let’s just offer it to them and move on.”

“Are the cases being thought about seriously? Sometimes you shouldn’t go after the corporation. Sometimes you should go after the corporation harder. But they seem to have taken on more of a one size fits all. They seem to becoming more generic now.”

“I wonder – is this the best thing? I don’t think it has been thought through on any real level. It has just become – not the flavor of the month – but – this is the way we can resolve these cases and not be too heavily criticized one way or the other.”

“That’s sometimes what ends up happening in the government. If you can find a way to do something that doesn’t draw too much fire, then that becomes the accepted method of operation.”

Before joining Wayne State Law School, Henning spent a number of years as an enforcement official at the Securities and Exchange Commission and then as a federal prosecutor at the Justice Department.

What about the historic friction between the two?

“The historic friction has dissipated,” Henning said. “From the SEC’s point of view, they didn’t think they were being listened to. And the few times that they were listened to, the prosecutors simply took over the case.”

“I was at the SEC during the Milken/Boesky era. In some cases they worked well together. In other cases, they didn’t share their toys very well in the sandbox.”

“I get the feeling that over the last ten years or so there has been much better cooperation. And that’s partly because other districts have gotten more involved in cases.”

“At one time, everything ran through New York. It was nicknamed the Sovereign District of New York. It was always a little bit problematic. Or it depended on personalities.”

“Up until recently, the sharing of information had always been a one way street – the SEC gave it to the Department of Justice. The Department of Justice didn’t have to give anything back. And it usually didn’t.”

“In the Galleon case, you do have what appears to be real sharing of information. The federal statute on wiretaps restricts disclosure on wiretap information. It can only be used for legitimate law enforcement purposes. The interesting question in that case is – does that legitimate law enforcement purpose cover the SEC civil enforcement?”

“Normally, you would think that it would just be criminal law enforcement. But the SEC has civil law enforcement powers. Can that be shared?”

“The case is interesting because it shows real close cooperation between the two. But there are some barriers to the disclosure of information.”

What’s going to happen in the Galleon case?

“The wiretap act was written to be used in mob and drug cases. In white collar cases, you generally don’t see a real time wiretap – where you actually hear discussions of criminal conduct as they are taking place. You don’t get that in white collar cases. Or very rarely – unless you are running a sting.”

“You never worried about civil enforcement in a drug or a mob case. Now you have the SEC and they are using a new tactic. And it is very much a brand new world. I hate to hazard a guess. I once predicted that Enron wouldn’t go criminal.”

What was your thinking on that?

“I told my white collar crime case in 2001 – when the first reports came out about shareholder equity – I told the class – this looks like an SEC accounting disclosure case. I doubt it will go criminal. It is way too complex. Boy was I wrong.”

[For a complete transcript of the Interview with Peter Henning, see 24 Corporate Crime Reporter 6(12), print edition only.]



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