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Criminalizing business operations

Is the US government running the world’s largest shakedown (1) operation? If you are a big business, America’s regulatory system has been a huge money drain (2) for you recently.

The formula is simple. Look for a large company; threaten its managers with criminal charges; and force them to make enormous payouts in a non-public settlement (3).

Recent victims of this system include some of the largest corporations in the world: BP, Bank of America, BNP Paribas, Goldman Sachs, Citigroup, JPMorgan Chase and Toyota. The fines that these corporations agreed to pay are quite remarkable, too: BNP paid $9 billion for alleged violations of US sanctions against Iran and Sudan. The other banks, taken together, had to pay about $50 billion for allegedly having misled investors into buying toxic financial assets. BP had to pay over $13 billion for polluting the Gulf of Mexico.

The problem with these out-of-court settlements (3) is that they are taking place behind closed doors and tend to resemble extortion (4).

Also, the agencies that collect the fines have effectively become profit centres: New York’s governor and attorney-general, for instance, have argued about how the settlement amount of $613 million paid by JPMorgan is to be divided.

As the cases never go to court, it remains unclear what exactly is illegal. This leaves room for future shakedowns (1) and has enormous implications in terms of costs.

Consequently, the increasing criminalisation of corporate behaviour in America is bad for capitalism.



  1. According to the article, in what way does the US regulatory system resemble a ‘shakedown operation’ (see also the definition of ‘shakedown’ (1) in the vocabulary section below)?
  2. What are, according to the article, the elements of that supposed operation?
  3. Does the text suggest that the corporations that had to pay fines were in fact innocent?
  4. According to the article, what is wrong with the current system of settlements?
  5. Why is, according to the article, the current system bad for capitalism?
  6. Do you agree with the article? Why/why not?
  7. Can you think of any recent high-profile disputes between corporations and the Czech state? What was the result of these disputes? Do you see any connection between these disputes and the topic of the article?


shakedown (1) – when someone gets money from another person by using threats

drain (2) – to make the water or liquid in something flow away (often used figuratively)

settlement (3) – an official agreement or decision that ends an argument, a court case, or a fight, or the action of making an agreement

extortion (4) – to illegally force someone to give you something, especially money, by threatening them


You can find additional explanation and more examples to help you understand and use English words and phrases at https://dictionary.reference.com, https://dictionary.cambridge.org/, https://www.merriam-webster.com/ or https://www.ldoceonline.com/