On September 15, 2022, US Deputy Attorney General Lisa Monaco delivered remarks on corporate criminal enforcement and announced several changes that the Department of Justice will be implementing in order to strengthen the way it prioritizes and prosecutes corporate crime. According to Monaco, the DOJ’s top priority is individual accountability and pursuing individuals who commit and profit from corporate crime. While acknowledging that data shows an overall decline in corporate criminal prosecutions over the last decade, she indicated that speed was of the essence and that prosecutors should move faster. Going forward, in an effort to prevent undue and intentional delays in document disclosures made during corporate investigations, such delays will result in a reduction or denial of cooperation credit, particularly in investigations involving individual culpability.
After last year’s announcement regarding the DOJ’s commitment to consider the full criminal, civil and regulatory history of a company when deciding an appropriate resolution, many shared concerns for a need to contextualize historical misconduct and to consider the age of misconduct, its regulatory environment and subsequent reforms in the company’s compliance culture. To address these concerns, prosecutors will start giving more weight to prior criminal misconduct that occurs in the US and prior wrongdoing that involves the same personnel or management as the misconduct under investigation. In addition, criminal resolutions occurring more than 10 years before, and civil or regulatory resolutions occurring more than 5 years before the conduct under investigation, will be accorded less weight. Companies should also no longer assume that they are entitled to a Non-Prosecution Agreement (NPA) or Deferred Prosecution Agreement (DPA), particularly when it comes to recidivists. Going forward, all offers for successive NPAs or DPAs will be scrutinized.
Monaco is also committed to rewarding companies that voluntarily self-disclose possible violations and stated that “the clearest path for a company to avoid a guilty plea or an indictment is voluntary self-disclosure.” In an effort to incentivize companies to self-report, every section or component in the DOJ that prosecutes corporate crime will, for the first time ever, implement a program that incentivizes voluntary self-disclosure, and if a formal, documented policy does not exist, one will be drafted. The DOJ will also implement new voluntary self-disclosure policies including a commitment not to seek a guilty plea when a company has voluntarily self-disclosed, cooperated and remediated misconduct as long as there are no aggravating factors. The DOJ will also not require an independent compliance monitor if the company has implemented and tested an effective compliance program at the time of resolution.
Monaco also indicated that, in an effort to reduce suspicion and confusion surrounding monitors and increase transparency and the likelihood of success, the DOJ will be providing prosecutors with new guidance how to identify the need for a monitor, select a monitor, and then oversee the monitor’s work. Going forward, all monitors will be selected pursuant to a transparent and consistent documented process. In addition, prosecutors will tailor every monitorship to the misconduct and compliance deficiency of the resolving company, and will monitor the compliance monitors to ensure that they “remain on the job, on task, and on budget.”
Finally, Monaco reiterated that successful corporate compliance requires companies to do more than establish a compliance department and emphasized the importance of companies developing a corporate culture that promotes compliance and rejects wrongdoing. Going forward, federal prosecutors will evaluate the strength of a company’s compliance program by looking for policies that reward compliance-promoting behavior and deter misconduct by imposing financial sanctions on employees, executives, and directors such as clawback provisions on compensation for those whose actions directly contribute to criminal conduct.