DOJ Promises to Crack Down on White-Collar Crime. Will Anything Really Change?
The Department of Justice recently outlined a new, tougher policy toward prosecuting white-collar criminals. According to Deputy Attorney General Lisa Monaco, the DOJ is going to focus more on prosecuting individuals who benefit from corporate misconduct. The agency will also focus more attention and resources on repeat offenders.
Going After Individuals
In remarks to the American Bar Association's National Institute on White Collar Crime, Monaco said that "Accountability starts with the individuals responsible for criminal conduct. Attorney General Garland has made clear it is unambiguously this department's first priority in corporate criminal matters to prosecute the individuals who commit and profit from corporate malfeasance."
DOJ Offers Companies a Carrot and a Stick
In addition to promising to hold individuals accountable, the DOJ is encouraging companies to examine their compliance programs and focus on corporate culture to reduce the chances it will find itself under investigation. Companies that fail to do so, Monaco warned, will find it to be a "costly omission," while companies that proactively try to improve corporate culture, ethics, and compliance will receive credit for their cooperation in the case they find themselves under investigation. Put simply, the DOJ is proactively incentivizing companies to find and report their internal misconduct while promising a tougher stance on companies that turn a blind eye.
Policy Changes for DOJ Corporate Investigations
Is this just tough talk by federal prosecutors, or are there going to be real actions taken? The full extent of policy changes isn't yet clear, and the DOJ has promised more substantive changes to come. In the meantime, there are four specific items in Monaco's speech to note:
- The main policy change is that DOJ investigations of corporate misconduct will now include the entire criminal, civil, and regulatory record of the company. In other words, the agency is promising to be more factually thorough in its investigations.
- The DOJ is amending their policy of looking only at individuals "substantially involved" in misconduct. Instead, it will look at every individual involved in the misconduct.
- The DOJ is now requiring that companies produce all non-privileged information about individuals involved in the misconduct to receive cooperation credit—regardless of the individual's position, status, or seniority.
- Monaco suggested that corporate monitors for DOJ investigations will be more common. Till now, there has been an assumption that the use of monitors would be the exception rather than the rule. For companies negotiating resolutions with the DOJ, Monaco suggested that there is no longer "a default presumption against corporate monitors." So companies who have been or are under investigations may see more independent oversight.
What This Means for Companies
While it's still too early to tell how much impact the policy change will have on DOJ investigations, it is clear that Merrick Garland is publicly committing his agency to be tougher on corporate crime—which could, in turn, lead to produce results. The upshot of this is that now may be a good time to look again at compliance and corporate culture.
It is clearly a goal of the DOJ to encourage companies to look at their corporate culture and take initiative to make internal improvements. Companies that fail to do so may find it more difficult to negotiate a resolution with the DOJ than in previous years, and those investigations could now potentially lead to more consequences for the individuals involved.