DOJ Safe Harbor policy

• By offering presumption of criminal declination, DOJ is attempting to encourage cooperation and voluntary self-disclosure while providing clarity and predictability in its benefits
• Deadlines to self-disclose (six months from deal closing) and remediate (one year from deal closing) are aggressive but can be extended
• Criminal declination will require full cooperation and disgorgement of ill-gotten profits of acquired company

DOJ compensation incentives pilot program

• DOJ will reduce criminal penalties and otherwise offer credit for companies that opt to claw back compensation or attempt to do so
• The lodestar: the creation of a system that deters misconduct and promotes a culture of compliance
• Companies can start by examining executive compensation, evaluating a system for withholding bonuses, articulating a standard for triggering compensation clawback, and updating their employment materials

UK extension of corporate criminal liability

• Introduction of a new “failure to prevent fraud” offense later in 2024, which will widen the scope of corporate criminal liability
• New offense making corporates liable for the economic crimes of their “senior managers” has also significantly broadened the scope of corporate liability and a renewed focus on the role of senior management
• The increased scope for liability will require organizations to review their policies and procedures in detail to cover increased risk

Client Alert 2024-024