Secondary Titles (1)
- Jesse Fine Fellow, The Poynter Center for the Study of Ethics and American Institutions
Todd Haugh is an Assistant Professor of Business Law and Ethics. His scholarship focuses on white collar and corporate crime, federal sentencing, and business ethics, exploring the decision-making processes of the players most central to the commission and adjudication of economic crime. His work has appeared in top law and business journals, including the Northwestern University Law Review, Notre Dame Law Review, Vanderbilt Law Review, and Fordham Law Review. He is regularly quoted in national news publications such as the Wall Street Journal, the Chicago Tribune, the Chicago Sun-Times, Bloomberg News, Politico, USA Today, and the Christian Science Monitor, as well as various legal, business, and popular blogs. And he currently serves on the White Collar Editorial Board of the legal news publication LAW360. A graduate of the University of Illinois College of Law and Brown University, Prof. Haugh has extensive professional experience as a white collar criminal defense attorney, a federal law clerk, and a member of the general counsel’s office of the United States Sentencing Commission. In 2011, he was chosen as one of four Supreme Court Fellows of the Supreme Court of the United States to study the administrative machinery of the federal judiciary. Prior to joining the Kelley School of Business, where he teaches courses on business ethics and white collar crime, Prof. Haugh taught criminal procedure and advanced legal writing and advocacy at DePaul University College of Law and Chicago-Kent College of Law. A recipient of teaching awards for classroom innovation and a Jesse Fine Fellowship from the Poynter Center for the Study of Ethics and American Institutions, his classes take a unique look at how ethics, law, business, and psychology interact in today’s complex world.
Areas of Expertise (8)
Recipient, Jesse Fine Fellowship, The Poynter Center for the Study of Ethics and American Institutions
2016 - 2017
Recipient, Innovative Teaching Award, Kelley School of Business
Recipient, MBAA International McGraw-Hill Education Distinguished Paper Award
University of Illinois College of Law: J.D., Law 2002
Brown University: B.A. 1999
Media Appearances (2)
Trump Family May Face Fallout From Latest Cohen Plea
Law 360 online
According to Todd Haugh, an assistant professor of business law and ethics at Indiana University's Kelley School of Business...
Durkin told panel Loh didn’t want Maryland players talking to football investigator
Valdosta Daily Times online
Todd Haugh, a business law and ethics expert, said that “even the appearance of conflict can be problematic. People are going to gravitate to folks they already know or have a relationship with,” said Haugh, an assistant professor at Indiana University’s Kelley School of Business. “The intentions are often laudable and above board, but the risk is that there are subconscious biases or subconscious conflicts"...
Companies are nudging. That is, they are using the tools of behavioral science as pioneered by behavioral economists and promoted by policymakers to steer employees toward welfare-maximizing options. While companies began nudging to increase employee health, safety, and financial literacy, choice architecture is now being used to make employees more ethical. “Behavioral ethics nudging” is seen as the future of corporate compliance because it offers an evidence-based, cost effective way to reduce the risks of respondeat superior liability. Amid that promise, however, lies a nagging unease. Behavioral ethics research demonstrates that ethical decision making is influenced, often subconsciously, by situational and social factors. When a company alters the conditions under which its employees make decisions, their ethical behavior can be changed without them knowing it. Thus, the intent of behavioral ethics nudging may be laudable—to increase employee ethicality and improve compliance—but it is also susceptible to becoming a tool of unwanted behavioral manipulation.
This Article undertakes the first detailed analysis of the role of behavioral ethics nudging in corporate compliance. Viewing the issue from an empirical and normative lens, it finds that while nudging offers important compliance opportunities, it must be implemented with caution. That is because nudging employees to be more ethical is conceptually distinct from governmental nudges popularized as a way of promoting public welfare. Companies that simply import public policy nudges into the workplace may find them wholly ineffective as a compliance strategy. Moreover, behavioral ethics nudging may violate deeply held notions of personal autonomy, especially when it surreptitiously capitalizes on employees’ cognitive irrationalities. While some autonomy costs may be justified under legal doctrines and consequentialist analysis, a significant question remains whether behavioral ethics nudges are ethical themselves. Drawing on this analysis, which is supported by extensive behavioral ethics research, the Article offers a simple framework companies can use when contemplating employing behavioral ethics nudging as part of their compliance regimes.
Corporate compliance is becoming increasingly “criminalized.” What began as a means of industry self-regulation has morphed into a multi-billion dollar effort to avoid government intervention in business, specifically criminal and quasi-criminal investigations and prosecutions. In order to avoid application of the criminal law, companies have adopted compliance programs that are motivated by and mimic that law, using the precepts of criminal legislation, enforcement, and adjudication to advance their compliance goals. This approach to compliance is inherently flawed, however—it can never be fully effective in abating corporate wrongdoing. Criminalized compliance regimes are inherently ineffective because they impose unintended behavioral consequences on corporate employees. Employees subject to criminalized compliance have greater opportunities to rationalize their future unethical or illegal behavior. Rationalizations are a key component in the psychological process necessary for the commission of corporate crime—they allow offenders to square their self-perception as “good people” with the illegal behavior they are contemplating, thereby allowing the behavior to go forward. Criminalized compliance regimes fuel these rationalizations, and in turn, bad corporate conduct. By importing into the corporation many of the criminal law’s delegitimizing features, criminalized compliance creates space for rationalizations, facilitating the necessary precursors to the commission of white collar and corporate crime. The result is that many compliance programs, by mimicking the criminal law in hopes of reducing employee misconduct, are actually fostering it. This insight, which offers a new way of conceptualizing corporate compliance, explains the ineffectiveness of many compliance programs and also suggests how companies might go about fixing them.
Keywords: corporate compliance, corporations, criminal law, corporate law, behavioral ethics, organizations, organizational legitimacy, business ethics, white collar crime, rationalizations, criminology, corporate prosecutions, behavioral psychology, behavioral economics
The harms of overcriminalization are usually thought of in a particular way — that the proliferation of criminal laws leads to increasing and inconsistent criminal enforcement and adjudication. For example, an offender commits an unethical or illegal act and, because of the overwhelming depth and breadth of the criminal law, becomes subject to too much prosecutorial discretion and faces disparate enforcement or punishment. But there is an additional, possibly more pernicious, harm of overcriminalization. Drawing from the fields of criminology and behavioral ethics, this Article makes the case that overcriminalization actually increases the commission of criminal behavior itself, particularly by white collar offenders. This occurs because overcriminalization, by delegitimatizing the criminal law, fuels offender rationalizations. Rationalizations are part of the psychological process necessary for the commission of crime — they allow offenders to square their self-perception as “good people” with the illegal behavior they are contemplating, thereby allowing the behavior to go forward. Overcriminalization, then, is more than a post-act concern. It is inherently criminogenic because it facilitates some of the most prevalent and powerful rationalizations used by would-be offenders. Put simply, overcriminalization is fostering the very conduct it seeks to eliminate. This phenomenon is on display in the recently decided Supreme Court case Yates v. United States. Using Yates as a backdrop, this Article presents a new paradigm of overcriminalization and its harms.
This September marks six years since the collapse of Lehman Brothers and the height of the financial crisis. Recently, a growing debate has emerged over the Justice Department’s failure to criminally prosecute Wall Street executives for their role in creating the crisis. One side of that debate contends the government has failed to bring to justice individual wrongdoers — primarily the heads of banks operating in the mortgage-backed securities market — instead preferencing enforcement decisions that target corporations, resulting in punishments that are “little more than window-dressing.” The other side argues that cases against individuals are precluded by the realities of the federal criminal justice system, and that “corporate headhunting” will only inhibit meaningful regulatory reform.
It is difficult, however, to evaluate these competing claims without proper context. This Article explores the recent conviction and sentencing of Wall Street executive Kareem Serageldin as a means of providing that context. Although Serageldin has been trumpeted as the “the most senior Wall Street official” to be sentenced for conduct committed during the financial crisis, and his conviction was framed as a victory in punishing those accountable for the financial collapse, a critical look at his case reveals he committed only a mundane white collar crime marginally related to the crisis. This disconnect creates a unique lens through which to understand and evaluate the current state of — and debate surrounding — financial crisis prosecutions. And it ultimately highlights the merits, and shortfalls, of each camp’s arguments. The Article concludes by offering something largely absent from the current debate: specific proposals for how we might go about prosecuting individuals so as to prevent the next crisis.
“So why did Mr. Gupta do it?” That question was at the heart of Judge Jed Rakoff’s recent sentencing of Rajat Gupta, a former Wall Street titan and the most high-profile insider trading defendant of the past 30 years. The answer, which the court actively sought by inquiring into Gupta’s psychological motivations, resulted in a two-year sentence, eight years less than the government requested. What was it that Judge Rakoff found in Gupta that warranted such a modest sentence? While it was ultimately unclear to the court exactly what motivated Gupta to commit such a “terrible breach of trust,” it is exceedingly clear that Judge Rakoff’s search for those motivations impacted the sentence imposed.
This search by judges sentencing white collar defendants — the search to understand the “why” motivating defendants’ actions — is what this article explores. When judges inquire into defendants’ motivations, they necessarily delve into the psychological justifications defendants employ to free themselves from the social norms they previously followed, thereby allowing themselves to engage in criminality. These “techniques of neutralization” are precursors to white collar crime, and they impact courts’ sentencing decisions. Yet the role of neutralizations in sentencing has been largely unexamined. This article rectifies that absence by drawing on established criminological theory and applying it to three recent high-profile white collar cases. Ultimately, this article concludes that judges’ search for the “why” of white collar crime, which occurs primarily through the exploration of offender neutralizations, is legally and normatively justified. While there are potential drawbacks to judges conducting these inquiries, they are outweighed by the benefits of increased individualized sentencing and opportunities to disrupt the mechanisms that make white collar crime possible.
Ted Kaczynski and Bernie Madoff share much in common. Both are well-educated, extremely intelligent, charismatic figures. Both rose to the height of their chosen professions — mathematics and finance. And both will die in federal prison, Kaczynski for committing a twenty-year mail-bombing spree that killed three people and seriously injured dozens more, and Madoff for committing the largest Ponzi scheme in history, bilking thousands of people out of almost $65 billion. But that last similarity — Kaczynski’s and Madoff’s plight at sentencing — may not have had to be. While Kaczynski’s attorneys tirelessly investigated and argued every aspect of their client’s personal history, mental state, motivations, and sentencing options, Madoff’s attorneys offered almost nothing to mitigate his conduct, simply accepting his fate at sentencing. In the end, Kaczynski’s attorneys were able to convince the government, the court, and their client that a life sentence was appropriate despite that he committed one of the most heinous and well-publicized death penalty-eligible crimes in recent history. Madoff, on the other hand, with almost unlimited resources at his disposal, received effectively the same sentence — 150 years in prison — for a nonviolent economic offense. Why were these two ultimately given the same sentence? And what can Madoff, the financier with unimaginable wealth, learn from Kaczynski, the reclusive and remorseless killer, when it comes to federal sentencing?