DOJ Unveils New Policies To Incentivize Responsible Corporate Citizenship And Deter Wrongdoing

• Published date: 19 September 2022
• Subject Matter: Corporate/Commercial Law, Criminal Law, Compliance, Corporate and Company Law, Corporate Crime
• Law Firm: Ropes & Gray
• Author: James P. Dowden, Ryan Rohlfsen, Jessica L. Soto, Haley Eagon and Megan Zwiebel

On September 15, 2022, before an audience at NYU School of Law that included the Director of the SEC's Enforcement Division Gurbir Grewal, U.S. Attorneys for the Southern District of New York and District of New Jersey, and several line prosecutors, Deputy Attorney General Lisa O. Monaco announced important changes to corporate criminal enforcement. These changes are the result of ongoing study by the DOJ's Corporate Crime Advisory Group, a group of DOJ experts tasked with a review of corporate enforcement efforts, which Monaco first publicized last October. During her most recent remarks, Monaco emphasized that the DOJ will implement a combination of incentives and deterrents to "make the business case for responsible corporate behavior" and shift the burden of corporate financial penalties away from shareholders. The Department also released an accompanying memorandum further describing the changes. Monaco's remarks make clear that the DOJ is taking concrete steps to accompany the more aggressive prosecutorial stance against corporate crime that it adopted last October.

1. Holding Individuals Accountable, Faster

Monaco began by emphasizing that the DOJ continues to consider individual accountability'the pursuit of individuals who commit or profit from corporate crime'its top priority. To that end, Monaco announced a new requirement with respect to DOJ cooperation credit. Specifically, a cooperating company must quickly alert the DOJ to "important evidence."

Companies that delay turning over evidence of individual malfeasance do so at their peril: "undue or intentional delay in producing information or documents'particularly those that show individual culpability'will result in reduction or denial of cooperation credit," she warned.

However, the burden of moving individual cases will not fall solely on companies. Monaco explained that DOJ prosecutors "will work to complete investigations and seek warranted criminal charges against individuals prior to or at the same time as entering a resolution against a corporation." In instances where the corporate case is resolved first, prosecutors now must create an investigative plan with an outline and timeline for resolving any remaining individual cases.

2. Revised Approach to Historical Misconduct

Last year, Monaco announced that the DOJ now considers a company's full criminal, civil, and regulatory record when determining an appropriate resolution'a controversial move at the time. In her recent speech she...