On May 12, the head of the Department of Justice's Criminal Division, Matthew Galeotti, delivered a speech at the Securities Industry and Financial Markets Association (SIFMA) Anti-Money Laundering and Financial Crimes Conference. His speech announced the Criminal Division's white-collar enforcement plan to focus the division's efforts on the “most egregious white-collar crime” and its new plan to encourage companies to self-report and potentially receive leniency because of that self-reporting.
The Criminal Division is “laser-focused on the most urgent threats to our country, our citizens, and our economy.” A part of that laser focus is a renewed effort to incentivize companies to self-report and avoid long, drawn-out investigations, which are costly and time-consuming. Galeotti commented that “[E]xcessive enforcement and unfocused corporate investigations stymie innovation, limit prosperity, and reduce efficiency.”
Galeotti went on to address American companies: “We are here to work with you. Our goal is practicality.” As a way to encourage self-reporting, the Criminal Division will be implementing an “easy-to-follow flow chart” that allows a company that meets core requirements (voluntarily self-disclosing to the Criminal Division, fully cooperating and appropriately remediating, and having no aggravating circumstances) to be entitled to declination rather than a criminal resolution.
This means that a company that self-reports and fully cooperates with the Department of Justice may be able to avoid having charges filed against them for what is arguably criminal conduct. At this point, however, it is unclear what may count as “aggravating circumstances” or what “full cooperation” may look like. As such, before self-disclosing to the Justice Department, corporations should seek legal counsel and be fully advised of whether their self-disclosure might be enough to head-off criminal charges.
In addition to the self-reporting policy, the Criminal Division also announced revisions to its monitor selection policy. Finding that the current monitor selection policy “can be a burden on businesses,” the Criminal Division has announced a new policy of only insisting on monitors when the value the monitors add would outweigh the costs they impose. To determine that value, the Criminal Division would analyze the prospective use of a monitor by looking at the following factors:
- The nature and seriousness of the conduct and risk of reoffending;
- The availability of other effective independent government oversight;
- The efficacy of the company's compliance program, and
- The maturity of the company's controls and ability to test and update its compliance program.
This announcement from the Criminal Division demonstrates an effort to address potentially expensive internal investigations and the resulting monitoring presence that may follow.
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