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DOJ introduces new standards for corporate and white collar crime

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Inicio Perspectivas DOJ introduces new standards for corporate and white collar crime
On October 28, 2021, Deputy Attorney General Lisa Monaco announced new standards for the prosecution of corporate and white collar crime and, in particular, a return to the use of corporate monitorships. After a move during the Trump administration to limit the use of such monitorships (as well as a 25-year low in corporate and white collar prosecutions in general), this indicates a shift toward increased enforcement. This shift will impact both corporations currently under investigation and/or considering cooperating with the Department of Justice (DOJ), as well as corporate approaches to environmental, social, and governance (ESG) risks and disclosures. Further, the new priorities provide important guidance for how corporations should proceed in the future, both when facing investigations and when considering voluntary disclosures.

During Monaco’s presentation, she indicated three primary enforcement priorities. First, the DOJ will prosecute all individuals who commit and profit from corporate crime, including corporate executives. Second, the DOJ will increase its corporate enforcement resources. Third, the DOJ will hold companies accountable that do not proactively put compliance programs in place, spend resources anticipating problems, or hold individuals accountable.

This set of priorities came along with very clear steps the DOJ will take over the coming months. Here are three of those steps and how they may impact companies under investigation by the Justice Department.

DOJ action step #1: new limits on corporate cooperation credit

Monaco announced that the standards previously articulated in the DOJ’s Yates Memo (dated September 9, 2015 and entitled “Individual Accountability for Corporate Wrongdoing”) will be reenacted, and that corporate cooperation credit will only be available to companies that provide all non-privileged information about individuals involved in or responsible for the misconduct at issue. This matches the focus on individual culpability and requires a company to disclose all individuals involved in the misconduct – regardless of their position, status, or seniority – not simply those that the company determines are “substantially involved.”

Potential impact

This action may expand the scope of internal investigations, as well as required litigation holds, document collections, and interviews. Companies will have to be very cautious when determining the relevant list of individuals to investigate, as they may lose cooperation credit if the DOJ finds that they have not been fully transparent.

DOJ action step #2: investigate all prior misconduct

Monaco directed federal prosecutors to consider all corporate misconduct when determining criminal charges and resolutions. This includes any misconduct discovered during prior domestic or foreign criminal, civil, or regulatory actions involving the company or its parent, divisions, affiliates, subsidiaries, or other entities within the corporate family.

Potential impact

This action will make it significantly more difficult for a company or its defense counsel to attempt to limit any DOJ investigation to the specific conduct at issue, as all allegedly problematic conduct (including conduct identified by other state and regulatory agencies) will now be considered when addressing potential dispute resolution. This widens the scope of information the DOJ will review and could include ESG disclosures and related regulatory inquiries from both domestic and international agencies. It also makes the need for prompt action, in consultation with counsel, to address any potential problems even more apparent – as well as a robust internal compliance program.