Suppose one of the primary purposes of imposing penalties is to create disincentives to commit fraud. Doesn’t that mean that these kinds of rewards for snitching may be appropriate, even if the resulting penalties appear to be too disparate ex post, much as Kaytal argues for special penalties when conspiracies occur? In other words, the point may not be to reward someone for snitching, but rather to discourage fraud in the first place by reducing the likelihood of success.

Mike, Katyal argues both that the charge of conspiracy deters conspiracy and that the price discrimination of guilty pleas is warranted by that ex-ante deterrence. In the corporate context, I am less convinced of this. Corporate crime almost by definition takes place in an organization and can almost never be executed with only one person knowing of the misconduct. We can theorize that because laws give conspirators an incentive to flip that less corporate crime takes place because no one can trust each other enough to begin the scheme. I'm not sure I would buy that theory. Also, the deterrence theory works if plea deals are given on a "last in, first out" basis. Each additional player makes the conspiracy unstable because that person could get a deal. However, Mr. Corigliano seems to be a case of "first in, first out." If the person that puts the conspiracy together in the first places gets the deal, then he will not be deterred from creating the conspiracy. The deals may go to the quickest runner to the prosecutor, but prosecutors seem to be rewarding major players who can give the most information, not minor participants who were additions to the conspiracy. Minor participants don't have much of value to bargain with.

Tattling isn't allowed at my house. My son and his friends are told this at the beginning of every play session, usually because someone tries it. His friend's parents know this, and most laugh at me a little when I explain it, but no one has ever asked me to let their child tattle.

Snitching (tattling) should never be rewarded. Except in the event of electrocution or massive blood loss, the only time it is acceptable, but not worthy of award, acclaim or amnesty, is when the person doing the tattling/snitching had nothing to do with the activity in question, received no benefit from that activity, and made an attempt to stop the activity short of snitching.

I've worked in corporate law departments for almost 10 years and the balance between legal/ethical vs. making money gets tougher to sell all the time. Companies should never reward guilty snitching and neither should governments.

Pauli Walnuts would be proud.

Christine. Well said. Your comment presents more clearly the issue that I alluded to with respect to the effects on ex ante deterrence of encouraging flipping witnesses. But now I am curious as to how we can move this discussion to the next step. You understand the tradeoffs involved and offer arguments as why you are not convinced. Suppose my guess is the opposite of yours, namely that the ex ante deterrence is worth it even in the corporate fraud context. Is there any evidence that can be brought to bear on the issue as to the relative costs and benefits of the rewarding various snitches?