The Use of Deferred and Non-Prosecution Agreements With Large Financial Institutions In The Age of “Too Big To Jail”
July 8, 2014 - Prior to 2001 the Department of Justice (DOJ) rarely entered into deferred prosecution and non-prosecution agreements (DPAs and NPAs) with financial institutions in lieu of criminal prosecution. Since then, DPAs and NPAs, which are agreements in which companies may or may not admit to wrongdoing and agree pay fines, have become the DOJ’s preferred tool for white collar criminal law enforcement.
The increasing use of DPAs and NPAs has raised the question of whether the DOJ maintains a “too big to jail” policy which favors banks that, because of their size and systemic importance, cannot be prosecuted for fear of seriously damaging the economy. This report details the DOJ’s increasing reliance on these types of agreements, and concludes that the transition has occurred without complete transparency as to why the agency enters in to agreements with companies rather than pursuing criminal prosecution. The DOJ should publicly disclose if and when it is providing favorable treatment under the law to financial institutions so that Congress can exercise its oversight authority.