November 2022 Foodman Website and JD Supra
corporate crime crimen corporativo

On September 15, 2022, Department of Justice (DOJ) Deputy Attorney General Lisa Monaco delivered  remarks on Corporate Criminal Enforcement at the NYU Program on Corporate Compliance and Enforcement and announced new guidance for the DOJ’s corporate enforcement policies.  The new corporate crime guidance focuses on individual accountability (DOJ’s #1 priority), companies with a history of misconduct, new policy on voluntary self-disclosures, compliance monitors and promoting compliance and avoiding improperly risky behavior.  How corporate crime is scrutinized, how prosecutors will be empowered and how companies doing the right is a top priority for the DOJ. Given the current uncertain and volatile environment, a company’s (including financial entities) risk assessment process and ensuring that it is adequately resourced is critical to an effective well-designed corporate compliance program. A company ought to reinforce and update all compliance efforts, policies, and procedures related to its size, industry, geographic footprint, and regulatory landscape.  Employee training, regular tested continuing education and data analytics are imperative to mitigate risks.  That said, companies that are in the midst of discovering corporate misconduct or are trying to implement an effective corporate compliance program to mitigate corporate crime risk ought to review Deputy Monaco’s message in the new guidance.

Changes the DOJ is implementing to further strengthen prioritization and prosecution of corporate crime:

Individual accountability: those who break the law will be held accountable regardless of their position, status, or seniority.  “Going forward, undue, or intentional delay in producing information or documents—particularly those that show individual culpability—will result in the reduction or denial of cooperation credit. Gamesmanship with disclosures and productions will not be tolerated.”  The DOJ is clear in that it will empower prosecutors by clearing impediments in their way in order to expedite the investigations of individuals.

Approach to companies with a history of misconduct:  given that between 10% and 20% of large corporate criminal resolutions have involved repeat offenders, DOJ will look at broader weaknesses in the compliance culture or practices, such as wrongdoing that occurred under the same management team or executive leadership.  Moreover, “if a corporation operates in a highly regulated industry, its history should be compared to others similarly situated, to determine if the company is an outlier.”

Voluntary self-disclosures: “We expect good companies to step up and own up to misconduct. Voluntary self-disclosure is an indicator of a working compliance program and a healthy corporate culture. Those companies who own up will be appropriately rewarded in the Department’s approach to corporate crime.  Our goal is simple: to reward those companies whose historical investments in compliance enable voluntary self-disclosure and to incentivize other companies to make the same investments going forward.”  Voluntary self-disclosure can save a company hundreds of millions of dollars in fines, penalties, costs, avoid reputational harms that arise from pleading guilty, and reduce the risk of collateral consequences like suspension and debarment in relevant industries.

Independent compliance monitors:   the DOJ is releasing new guidance for prosecutors about how to identify the need for a monitor, how to select a monitor, and how to oversee the monitor’s work to increase the likelihood of success.  In other words, “monitor the monitor.”

Corporate Culture:  looking the other way or ignoring red flags is not an option. “When prosecutors evaluate the strength of a company’s compliance program, they will consider whether its compensation systems reward compliance and impose financial sanctions on employees, executives, or directors whose direct or supervisory actions or omissions contributed to criminal conduct. Corporations that employ clawback or similar arrangements will be rewarded.”

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