Key Takeaways
- The DOJ's Criminal Division Head announced that companies which voluntarily self-disclose and meet certain criteria (e.g., no aggravating circumstances, full cooperation, timely and appropriate remediation) will receive a declination by the Criminal Division.
- Even companies that do not self-disclose quickly enough, or companies that self-disclose after the DOJ is already aware of the misconduct, will receive significant benefits (e.g., non-prosecution agreement with a term of less than three years, 75 percent reduction in criminal fines, and no monitor).
Earlier this month, the DOJ's Criminal Division Head, Matthew R. Galeotti, spoke at the Securities Industry and Financial Markets Association's (SIFMA) Anti-Money Laundering and Financial Crimes Conference in Washington, D.C., previewing a new DOJ policy change that would allow companies that voluntarily self-disclose to potentially avoid criminal resolution. As Galeotti himself stated, "never before have the benefits of self-reporting and cooperating been so clear."1
In his speech, Galeotti stated that "self-disclosure is key to receiving the most generous benefits the Criminal Division can offer." And by coming forward, companies can avoid "burdensome, years-long investigations that inevitably end in a resolution process in which the company feels it must accept the fate the Department has ultimately decided."
Most importantly, Galeotti stated that companies which voluntarily self-disclose and meet certain criteria (through an easy-to-follow flow chart)willreceive a declination, not just a presumption of a declination. That is, companies that meet core requirements – voluntary self-disclosure to the Criminal Division, full cooperation, timely and appropriate remediation, and no aggravating circumstances –will notbe required to enter into a criminal resolution, in what Galeotti described as "a clear path to declination."
Even companies with aggravating circumstances may still be eligible for declination "based on weighing the severity of those aggravating circumstances and the company's cooperation and remediation." Similarly, companies that self-disclose in good faith but not quickly enough, or after the DOJ is already aware of the misconduct, are still eligible for "significant benefits," such as a non-prosecution agreement with a term of less than three years, 75 percent reduction in criminal fines, and no monitor. However, Galeotti warned that where a company does not self-disclose, it will not receive these enhanced benefits – though prosecutors still have discretion to recommend any resolution (e.g., up to a 50 percent reduction in fines).
These new policies demonstrate the Criminal Division's new focus on targeting individual wrongdoers, who are often the culprits that commit crimes at the expense of shareholders and workers.
Footnote
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