Can a corporate entity be charged with criminal activity?

On Behalf of | Oct 22, 2019 | Financial Crimes

Today’s blog focus at Hilder Law is on corporate liability, specifically within the criminal sphere.

That spells subject matter that is immediately important for virtually any commercial enterprise. We note on the website of our long-established Houston criminal defense firm that potential liability for a corporation itself (not just individual actors within it) can raise especially strong concerns in business realms like the financial and energy sectors. We represent many valued and diverse clients in those industries and note that criminal prosecution of their businesses “can have dire consequences.”

The following bullet point list provides just a few representative examples of the punitive exactions a corporation can face if the entity itself is targeted in a criminal probe:

  • Loss of a business license and corporate charter
  • Inability to bid for lucrative government contracts
  • Appointment of a third-party receiver
  • Additional penalties meted out by civil authorities (especially heavy fines)
  • Ongoing and close scrutiny from regulatory agencies
  • Shareholder lawsuits

We note on our website the “two prong” evaluation that comes to the fore in an assessment of corporate criminality. First, an employee’s unlawful actions must be within the formal scope of his or her authority. Second, those actions must benefit the corporation.

One online overview of corporate criminal liability adds the following. It notes that a corporation can be found liable “if there is a rational relationship between the employee’s criminal act and his or her corporate duties.”

Corporate executives and directors must obviously take pains to implement policies and procedures that dampen risks relative to potential criminal liability for their business entities.

A proven legal team with a demonstrated record of advocacy advising corporate clients on criminal matters can help them do that and safeguard their continued opportunity to conduct business.

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