This Wall Street Journal ($) article examines the increasing criminalization of business in the post-Enron era, which has been a frequent topic on this blog. Although the article does a reasonably good job of summarizing the troubling trend, it comes up somewhat short on analyzing the key implications of the trend, such as the disincentive to take risks resulting from regulating business through criminalization and the degradation of the rule of law resulting from the government’s overly broad application of criminal laws in its quest to convict business interests. For more analysis in that regard, review this thread of blog posts over the past year and a half.
The money quote in the article come from Joseph Grundfest (earlier post here), the Stanford University business law professor and former SEC commissioner who is currently researching the implications of the government’s growing power to bludgeon business interests into cooperating with a criminal investigation even if those business interests do not believe that they have done anything wrong:

“It’s a lot like the scene in ‘The Godfather’ where Marlon Brando explains how he’s going to make an offer they can’t refuse.”

Along those same lines, this WSJ ($) article reviews the prison sentences that have been and are expected to be handed down in the latest string of criminal prosecutions of business executives, while this article examines the unusual arrangement in which the Newark, N.J. U.S. Attorney has inserted himself into the management of Bristol-Myers Squibb Co.. The company’s board agreed to the arrangement in order to stave off a large fine stemming from a criminal investigation into an alleged $2.5 billion fraud at the company.
American International Group Inc.’s board should get ready for the same type of arrangement with the Lord of Regulation. And don’t miss Professor Ribstein’s cogent analysis of the situation, in which he notes the big difference between prosecuting agency costs — such as sloppy corporate controls over executive compensation — and prosecuting a more clear-cut crime where the thief robs the victim at gunpoint.
By the way, Professor Ribstein’s point about the arbitrary nature of prosecuting agency costs is perhaps best reflected by the irony that the key prosecution witness against Messrs. Kozlowski and Swartz — Tyco outside counsel David Boies — is simultaneously defending Maurice “Hank” Greenberg against Mr. Spitzer’s criminal assault on AIG’s agency costs.
It does all get quite confusing, doesn’t it?