Definition of Global Settlement

Written by nick vardanega | 13/05/2017
Definition of Global Settlement
The 2003 global settlement agreed to by 10 of the nation's top investment firms was one of the largest and most notable global settlements. (new york stock exchange image by Gary from

A global settlement is a legal agreement that addresses or compromises both civil claims and criminal charges against a corporation or other large entity. Global settlements are used by corporations when their actions affect multiple jurisdictions and when they seek to minimise penalties or negative publicity.


According to the U.S. Department of Justice, a global settlement compromises civil claims and criminal charges. Doing so allows multiple U.S. attorney’s offices to merge parallel proceedings policies to share information, consult on legal issues and conduct joint investigations. A global settlement may result in civil and criminal claims as well as remedies by adjudication or settlement.

Criteria for Settlement

In order for a global settlement to be approved, two of the following conditions must be met: criminal plea agreements must be handled by criminal attorneys (same with civil plea agreements); each part of the settlement must separately satisfy the appropriate criminal and civil criteria; in a civil settlement, all affected parties must approve of the settlement; there must be separate documents memorialising the criminal plea agreement and the civil settlements, or defendants may not trade civil relief in exchange for a reduction in criminal penalty.

Global Settlements on Environmental Issues

According to the Environmental Crimes Deskbook, global settlements are often sought in cases of companies under environmental criminal investigations. In these cases it is often advantageous for these companies to seek simultaneous and comprehensive settlements of criminal and civil liabilities with federal and state governments. In one particular settlement, Exxon Corp. agreed to pay £9 million in criminal and civil fines to the federal government as well as the state governments of New York and New Jersey after a ruptured oil pipeline discharged 567,000 gallons of heating oil into New York Harbor.

2003 Global Settlement

Global settlements may also be sought by large financial institutions or brokerage firms that operate in several jurisdictions. On April 28, 2003, after a joint investigation by regulators into alleged conflicts of interest between investment banking and security research at brokerage firms, the U.S. Securities and Exchange Commission, the New York Stock Exchange, the National Association of State Securities Administration and then-New York Attorney General Eliot Spitzer reached a global settlement. Under the terms of the agreement, 10 of the nation’s top investment firms (including Bear Stearns, Goldman Sachs, Lehman Brothers, JP Morgan, Citigroup and Merrill Lynch) agreed to pay fines and restitution totalling £0.9 billion. Included in this settlement was £258 million in disgorgement, £323 million in penalties, £281.1 million to fund independent research investors and £52 million to fund investor education. The firms also agreed to undertake reforms to their future practices such as separating their research and investment departments.

Wall Street Investigation

In May 2010, the New York Times reported that a similar global settlement might be on the way for Wall Street banks. In light of an investigation by New York Attorney General Andrew Cuomo into whether the banks devised and sold securities to investors without telling them that they were simultaneously betting against them, these banks may seek a settlement in order to avoid any new allegations while Capitol Hill debates financial regulations. The Times article said that this settlement would likely be larger and come with a series of structural reforms.

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