Background
Deputy Attorney General (DAG) Lisa Monaco recently delivered a speech to the NYU Program on Corporate Compliance and Enforcement announcing ways the Department of Justice (DOJ) will "further strengthen how [it] prioritize[s] and prosecute[s] corporate crime." Last October, DAG Monaco announced DOJ's creation of a Corporate Crime Advisory Group to review enforcement efforts and outlined certain revisions to DOJ's existing corporate criminal enforcement policies and practices. DAG Monaco's recent remarks report on the Advisory Group's work.
DOJ will continue to focus on familiar themes: individual accountability, consideration of prior misconduct, and the availability of corporate monitorships, where appropriate. DAG Monaco's speech highlights five key areas the DOJ seeks to revitalize:
- Individual Accountability, Expedited Investigations,
and Timely Disclosures: DAG Monaco reiterated that
DOJ's top priority is prosecuting individuals "who commit
and profit from corporate crime." DOJ will empower prosecutors
by removing procedural hurdles and expediting investigations of
individuals, inducing cooperating companies to disclose key
evidence quickly. Accordingly, DOJ seeks to end the practice of
"gamesmanship" in untimely disclosures by denying
cooperation credit to companies who cause "undue or
intentional delay in producing information or
documents."
- History of Misconduct: DAG Monaco also
provided additional guidance about how DOJ evaluates historical
misconduct. DOJ will give greater weight to domestic criminal
resolutions and prior wrongdoing involving the same personnel or
management as the current misconduct in a given investigation.
Alternatively, DOJ will afford less weight to criminal resolutions
that occurred more than ten years before the conduct currently
under investigation and to civil or regulatory resolutions that
occurred more than five years prior to the current conduct. DOJ
will consider similarity in root causes between current and prior
misconduct, disfavor multiple, successive non-prosecution or
deferred prosecution agreements with the same company, and bring
charges or require guilty pleas where facts and circumstances
require. DAG Monaco emphatically stated that "times have
changed," dismissing the idea that corporations can still
operate under the notion that "criminal resolutions can be
priced in as the cost of doing business."
- Voluntary Self-Disclosures: DAG Monaco stated
that the "clearest path" for a company to avoid a guilty
plea or an indictment is voluntary self-disclosure. DOJ seeks to
incentivize companies' voluntary disclosure of misconduct to
the government and reward companies that have effective compliance
programs. For example, DOJ may not seek guilty pleas where a
company, absent aggravating factors, has voluntarily
self-disclosed, cooperated, and remediated misconduct. Similarly,
DOJ may forego an independent compliance monitor where a
corporation, at the time of resolution, has implemented and tested
an effective compliance program.
- Independent Compliance Monitors: DAG Monaco
outlined three approaches intended to foster transparency and
consistency regarding compliance monitorships: (1) the issuance of
new guidance for prosecutors on the need, identification,
selection, and oversight of corporate monitors; (2) the
implementation of a documented corporate monitor selection process;
and (3) the establishment of a tailored scope of every corporate
monitorship.
- Corporate Culture: DAG Monaco stated DOJ will evaluate companies' compensation systems, identifying whether the company rewards compliance and sanctions criminal misconduct. DOJ will assess whether what a company says and does aligns with its compensation systems.
DOJ's public messaging shows a clear and continued emphasis on corporate criminal enforcement. DAG Monaco emphasized that the "[DOJ] will continue to find ways to improve [its] approach to corporate crime" and it will "continue to seek targeted resources for corporate criminal enforcement," which includes a $250 million request from Congress for corporate crime initiatives next year.
Implications and Suggested Actions
- DAG Monaco's remarks highlight the immediate steps
companies should take to decrease the likelihood of being subject
to investigation or facing avoidable consequences from
non-compliance. Particularly with respect to compliance with
environmental laws, where companies face increasing scrutiny for
environmental performance not only from governments but also many
other stakeholders.
- Companies should consider proactive and timely self-disclosure
of misconduct that could rise to the criminal level. Moreover, if
companies choose to self-disclose, they should take care to ensure
disclosures are comprehensive and accurate.
- Companies should understand prior misconduct, identifying personnel or management previously involved, the nature and conduct of prior misconduct, and any internal financial penalties assessed or administrative actions taken. Companies should take extra care to incorporate lessons learned and avoid repeat infractions, relying on DOJ guidance to track and adapt compliance efforts continuously.
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