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Here's what it means when a company like Boeing faces criminal charges

·2 mins

Criminal charges against a corporation, like the ones being considered against a company in the aerospace industry, would be a serious blow, worsening the company’s financial situation and damaging its reputation. However, it wouldn’t necessarily result in past or current executives facing prison time.

While criminal charges against corporations are fairly common, they are more frequently brought against smaller companies rather than publicly-traded ones. It is rare for top executives, especially at larger companies, to face personal punishment.

Publicly traded companies typically seek civil settlements instead of criminal ones to avoid felony convictions. They may also negotiate deferred prosecution agreements, which allow the company to change its behavior within a specified timeframe to avoid prosecution for previous charges.

If new criminal charges were brought against the company, it could face significantly larger fines, potentially in the billions. This could lead to the company’s debt rating being downgraded, affecting its borrowing costs and financial stability.

In the most extreme scenario, the company could face restrictions in conducting business or be blocked from government contracts. This could have severe consequences for both the company and the economy.

While criminal charges can force smaller companies out of business, it is less common for larger businesses. One famous example is the accounting firm Arthur Andersen, which was found guilty of obstruction of justice and essentially forced out of business.

Overall, criminal charges against a corporation have serious implications, even without individual executives facing prison time. The reputational and financial consequences can be significant.