"More Cooperation Please": DOJ Revises Enforcement Policy to Encourage Even Greater Cooperation

• Published in: The Corporate Governance Advisor 2023-03, Vol.31 (2), p.33-35
• Main Authors: Boutros, Andrew S, Kelley, David N, Schleppenbach, Jay
• Format: Article
• Language: English
• Subjects: Aggravating circumstances; Attorneys general; Compliance; Cooperation; Crime prevention; Criminal investigations; Disclosure; Enforcement; Habitual offenders; Revisions; Securities fraud
• ISSN: 1067-6163

[...]companies that voluntarily self-disclose misconduct will now be eligible for declinations, even where aggravating circumstances that may ordinarily warrant a criminal prosecution are present, provided they meet the following criteria: * The voluntary self-disclosure was made "immediately" upon the company becoming aware of the allegation of misconduct. * At the time of the misconduct and the disclosure, the company had an effective compliance program and system of internal accounting controls that enabled the identification of the misconduct and led to the company's voluntary self-disclosure. * The company provided "extraordinary cooperation" with the Department's investigation and undertook "extraordinary remediation. Be it as it may and irrespective of whether corporate fraud is on the rise, one prime point of the study is that corporate fraud exists. [...]the current discussion of corporate fraud (in an environment of difficult economic times) as well as corporate cooperation and compliance serve as an important reminder for corporations of the high value of robust compliance programs. Beyond the obvious benefit of serving as a shield with the DOJ in the unfortunate event of a government investigation, compliance programs can help detect wrongdoing before it comes to the attention of regulators or even potentially deter it entirely.20 Indeed, the DOJ itself has repeatedly stressed that it will consider "the adequacy and effectiveness of the corporation's compliance program at the time of the offense, as well as at the time of a charging decision" in considering whether to bring charges.21 As we have previously advised, the DOJ's guidance on such compliance programs has stressed the need to provide these programs with adequate resources, incorporate lessons learned, and take a reasonable, individualized approach to compliance.22 Corporations and those who advise them should carefully develop and continually evaluate their compliance programs to ensure they are providing maximum protection from liability.