The word “bankruptcy” derives from the Italian word bancarotta (= broken bench) that during the Middle Ages was used to indicate the typical sanction applied to bankrupt tradesmen or bankers – the bench breaking, i.e. the breaking of the tradesman/banker’s money table. At its origin, thus, the word bankruptcy had a punitive meaning that has been preserved in continental Europe (for instance the words bancarotta, Bankrott and banqueroute still designate the criminal consequences of failure in Italy, Germany and France respectively), but it has been lost in the Anglo-American world, where bankruptcy presently indicates the default as such. This study focuses on criminal liability of directors and entrepreneurs for misconduct committed prior to bankruptcy in the US and Italy and tries to understand how the different regulation is likely to affect the economic agents’ behavior. We show that the boundary between a firm’s legal and illegal management appears more clear-cut in the US than in Italy, with positive effects on the economic behavior of entrepreneurs and managers.