U.S. DOJ calls for “good companies to step up” in latest Corporate Criminal Enforcement Announcement
On Thursday, September 15, 2022, Deputy Attorney General Lisa O. Monaco gave a speech before prosecutors, policymakers and academics at the New York University School of Law’s on Corporate Compliance and Enforcement Program. In the speech, the Deputy Attorney General outlined new Department of Justice policies that focus on encouraging and enticing companies to self-report criminal violations and cooperate in DOJ investigations.
The Deputy Attorney General made clear in her speech that the DOJ does not intend to let business go on as usual, stating that the new standards will be enforced – with enticements and dissuasions – and the DOJ aims to give general counsels and chief compliance officers the tools needed to implement responsible corporate behavior. The goal is to empower prosecutors and companies to do the right thing, and to hold anyone accountable that does not follow suit. The speech focused on five key areas:
- Individual accountability: The Department’s number one priority is that individual wrongdoers will be held accountable. The Deputy Attorney General expanded on this by stating that the corporate criminal enforcement will be specifically focused on the individuals who commit and profit from corporate crime. The policy urges companies with important evidence to come forward more quickly to avoid letting the statute of limitations expire. In the future, the failure by a company to do so will result in the reduction or outright denial of corporation cooperation credit.
- History of misconduct: The Deputy Attorney General noted that ten to twenty percent of large corporate criminal resolutions have involved repeat offenders; as a result, it is incumbent on prosecutors to look at the full range of a company’s misconduct when negotiating a settlement with a recidivist company. Past actions and the nature and circumstances of misconduct may not always reflect a company’s current culture and commitment to compliance; so, all history should be reviewed to create an accurate picture.
- Voluntary Self-Disclosure: The DOJ will provide incentives to those companies that voluntarily self-disclose misconduct as it is a sign that the company has developed a compliance program and has fostered a culture to detect misconduct and bring it to light. The DOJ ensures predictability in that there will be expectations regarding what self-disclosure entails, as well as the concrete benefits.
- Independent Compliance Monitors: New guidance for prosecutors will be released regarding how to identify the need for and select a monitor, as well as how to oversee the work of a selected monitor. The scope of every monitorship will be tailored to the specific misconduct and related compliance shortcomings of the involved company.
- Corporate Culture: Compliance programs should be strengthened and sharpened. These programs should be backed by, and integrated into, a corporate culture that rejects wrongdoing for the sake of profit. When evaluating a company’s compliance program, the DOJ will consider whether companies have policies that reward compliance-promoting behavior while also deterring misconduct.
Based on the remarks in the Deputy AG’s speech, a strong compliance and ethics culture and the ability to identify, investigate, and, where necessary and appropriate, disclose misconduct, is of paramount importance. Implementing a strong compliance program can save a company hundreds of millions of dollars in fines, penalties, and other costs, such as a monitor. It can also avoid reputational risks that may arise from being involved in a case and reduce the risk of collateral consequences, such as suspension and debarment from working in certain industries.
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