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The New Legal Trinity Responding to the growth of compliance operations throughout the world, Geoffrey Miller, Stuyvesant P. Comfort Professor of Law, has written the first casebook that examines three related areas of corporate legal practice together: The Law of Governance, Risk Management, and Compliance. Now, however, US attorneys are and more complex cases shows no Miller’s book has two goals: to serve as a resource for courses such as his own Compliance and Risk Managemaking headline-grabbing cases sign of abating. That means more ment for Attorneys, and to encourage legal scholars to against large public companies. The work—and more jobs—for lawyers. look at the three areas as a field of legal study of their own. amounts involved can be enormous. Since 2011, Wal-Mart, for in“Compliance is inseparable from the two other funcstance, has been under investigaCORPORATE LAW IN tions,” Miller explains. “Governance, because how a tion by the Department of Justice THE PUBLIC INTEREST complex institution is governed is a key part of how it complies with the law; risk management, because and the Securities and Exchange YU Law is a particularly nearly all programs pertinent to compliance are funCommission for possible violations intense center of activdamentally grounded in risk assessment and operated of the FCPA. The company says it ity for compliance law according to an organization’s enterprise risk managehas been cooperating with both US and enforcement and ment system.” and Mexican investigators lookrelated areas. At the heart of this ing into allegations that it paid off activity are Jennifer Arlen ’86, While this is a well-recognized trinity in the business world, referred to as GRC, it is only now making waves officials south of the border. EarNorma Z. Paige Professor of Law, in legal academia. “The carryover is very obvious,” lier this year, Wal-Mart announced and Geoffrey Miller, Stuyvesant Miller says. that it was anticipating spending P. Comfort Professor of Law. The up to $240 million in its fiscal year two have joined forces before. He compares the birth of this new field with the 2015 on the investigations. SimiSeveral years ago, with scholars development of administrative law. In the early 20th larly, cosmetics retailer Avon has from the Cornell and University of century, scholars realized that the administrative process, formerly part of the law of remedies, was in fact a spent more than $300 million Texas law schools, they founded separate discipline with its own content and structure. since 2008 on investigations by the Society for Empirical Legal Similarly, aspects of compliance have been dispersed US authorities into charges that Studies, which aimed to give legal among the various fields of legal thought, such as it bribed Chinese officials. theory a more scientific basis corporate law and even constitutional law. “People through data and analysis. Now they Meanwhile, recent settlements are realizing GRC is not a hodgepodge of ideas,” Miller in corporate criminal and civil have teamed up as faculty co-direcsays. “There’s an intellectual core to the topic.” enforcement actions have been even tors of the Program on Corporate greater. Last November, pharmaCompliance and Enforcement, ceutical giant Johnson & Johnson launched in spring 2014. paid $2.2 billion to resolve crimiThe program has a few purposes. The first is to provide intensive nal and civil liability actions by the US government for marketing training to students who are planseveral prescription drugs for uses ning to make careers in compliance not approved by the FDA. And in or enforcement. The second is to proAugust, news outlets reported that mote research and policy reform. In Bank of America agreed to the largest-ever civil settlement between April, for instance, the program co-sponsored with the American a corporation and the US government: more than $16 billion to Law Institute an invitation-only conference called “Deterring Corresolve allegations that the bank’s Countrywide Financial and Mer- porate Crime: Effective Principles for Corporate Enforcement.” It rill Lynch units knowingly sold faulty mortgage-backed securities. attracted star enforcement officials, defense lawyers, and academCorporate enforcement matters like these involve not only big ics, such as Preet Bharara, US attorney for the Southern District money but also a high degree of complexity. Typically, multiple of New York, and Benjamin Lawsky, New York State’s superintenstate, federal, and private parties are involved, and dealing with all dent of financial services, who both gave keynote speeches; former of them can require large legal teams well versed in different vari- SEC director of enforcement Robert Khuzami; and white-collar eties of criminal and regulatory law. The trend toward ever larger investigator Jules Kroll. (See more on page 16.)

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NYU Law Magazine 2014  

The annual magazine from NYU School of Law.

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