In her October 28, 2021 speech to the 36th ABA National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco emphasized that white collar crime is a top enforcement priority for the Department of Justice ("DOJ").1 This announcement is consistent with expectations that the Biden administration will have a more aggressive approach to corporate crime enforcement after years of significant decline in white collar fines and prosecutions during the Trump administration.
In a speech that urged prosecutors to focus strongly on individual accountability and "to be bold in holding accountable those who commit criminal conduct," Deputy Attorney General Monaco outlined three areas of change in DOJ's corporate criminal enforcement policies as well as the creation of a Corporate Crime Advisory Group within the DOJ. These initiatives, alongside the announcement of a surge of resources allocated to the DOJ and the creation of a new squad of Federal Bureau of Investigation ("FBI") agents that will be embedded in the DOJ's Criminal Fraud Section, promise to make a significant impact on investigations and prosecutions of corporate wrongdoing.
Three Policy Announcements to Strengthen the DOJ Arsenal to Combat Corporate Crime
To be eligible for cooperation credit, companies must provide all non-privileged information regarding all individuals involved in misconduct
As part of the DOJ's focus on individual accountability, Deputy Attorney General Monaco restored a 2015 guidance issued by then-Deputy Attorney General Sally Q. Yates providing that, to be eligible for any cooperation credit, companies must provide all non-privileged information about all individuals involved in the misconduct at issue, regardless of their position, status or seniority.2 This 2015 guidance was later modified by former Deputy Attorney General Rod Rosenstein who announced in 2018 that companies had to provide such information solely about individuals "significantly involved" in the misconduct.3 According to Deputy Attorney General Monaco, such a distinction is confusing, gives too much discretion to companies, and limits the ability for the DOJ to collect important information from individuals who may have a peripheral role in the potential wrongdoing. Under the renewed approach, corporations will have to once again disclose all individuals whatever their degree of involvement in the misconduct, and the DOJ will make its own determination about the relevance and potential culpability of these individuals.
All prior misconduct must be evaluated to determine the appropriate resolution to a criminal investigation
Deputy Attorney General Monaco announced another important shift in DOJ policy. Until now, when making a charging decision against a corporation, federal prosecutors were directed to evaluate that corporation's criminal history of similar misconduct.4 Going forward, prosecutors will be directed to consider the full criminal, civil and regulatory record of any company, even prior misconduct that is not similar to the wrongdoing at issue, when deciding what resolution is appropriate for a company under a criminal investigation. Prosecutions led by another country or state will also be considered. According to Deputy Attorney General Monaco, looking at a corporation's entire record "speaks directly to a company's overall commitment to compliance programs and the appropriate culture to disincentivize criminal activity." It is worth noting that Deputy Attorney General Monaco did not indicate how recent the prior misconduct must be in order to be taken into consideration or whether an investigation that did not result in an enforcement action would count as prior misconduct. This new guidance will be included in an amendment to the DOJ's "Principles of Federal Prosecution of Business Organizations."
This new approach could have a significant impact, especially on international companies operating in regulated industries for which they are likely to face heightened scrutiny from multiple regulators and enforcement agencies in multiple jurisdictions.
The use of independent monitors is encouraged in the appropriate circumstances
Deputy Attorney General Monaco announced the rescission of prior guidance suggesting that the use of corporate monitors as part of a corporate resolution was disfavored. Memoranda issued in 2018 under the previous administration had directed federal prosecutors to consider monitors only in cases with a "demonstrated need of, and clear benefit from, a monitorship relative to the projected costs and burden."5 During her speech, Deputy Attorney General Monaco expressly stated that monitors should not be the exception and that prosecutors will be free to assess the need to impose independent monitors whenever it is appropriate to do so. Deputy Attorney General Monaco explained that monitorships are an essential enforcement tool for the DOJ to encourage and verify that a corporation will commit itself to improvement and self-police its activities. She also indicated that the DOJ will study the selection of corporate monitors and whether a standardization of the selection process is warranted.
Creation of Corporate Crime Advisory Group for Further DOJ Study
Perhaps the most important announcement was the news that more far-reaching changes may be coming. Deputy Attorney General Monaco stressed that the policy shifts are part of a broader approach to revisit DOJ's corporate criminal enforcement policies. To that end, she announced the creation of a Corporate Crime Advisory Group within the DOJ that will conduct further review of a variety of topics, including but not limited to:
- Monitorship selection.
- Recidivism: how to differently account for companies with a history of repeated DOJ investigations, and especially pretrial diversion Non-Prosecution Agreement ("NPA")/Deferred Prosecution Agreement ("DPA") are appropriate for certain recidivist companies.
- Non-compliance with NPAs and DPAs, including whether companies under the terms of an NPA or DPA take those obligations seriously enough. This signals a more aggressive approach to enforcement of the violation of NPAs and DPAs, which may have significant consequences, given the DOJ's unilateral approach to determining whether a company is in breach.6
- Benchmarks that can be used to measure a successful company's cooperation.
Notably, Deputy Attorney General Monaco stated that the Corporate Crime Advisory Group would "consult broadly", suggesting that it may solicit and take into account the views of the public, including the defense bar and the private sector.
Deputy Attorney General Monaco's announcement of policy changes, coupled with the increase of resources allocated to investigations and prosecutions of corporate wrongdoing, underscores the Biden administration's agenda of heightened white collar enforcement, and signals a likely increase in corporate investigations and prosecutions. Although the full impact of these changes remains to be seen, the changes should prompt companies to carefully review and, if necessary, revisit their compliance programs and related policies and procedures, and may also influence companies' strategic decision-making in self-reporting and cooperating with the DOJ.
1 Lisa O. Monaco, Deputy Attorney General of the United States Department of Justice, Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA's 36th National Institute on White Collar Crime (Oct. 28, 2021), available at https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.
2 See United States Department of Justice, Individual Accountability for Corporate Wrongdoing (Sept. 9, 2015), available at https://www.justice.gov/archives/dag/file/769036/download.
3 See United States Department of Justice, Deputy Attorney General Rod J. Rosenstein Delivers Remarks at the American Conference Institute's 35th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2018), available at https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-remarks-american-conference-institute-0.
4 United States Department of Justice, Justice Manual, 9-28.600 - The corporation's past history.
5 United States Department of Justice, Memorandum, Selection of Monitors in Criminal Division Matters (Oct. 11, 2018), available at https://www.justice.gov/opa/speech/file/1100531/download. This memorandum expanded the standards set forth in a 2008 memorandum surrounding corporate monitorships. See United States Department of Justice, Memorandum, Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations (May 7, 2008), available at https://www.justice.gov/sites/default/files/dag/legacy/2008/03/20/morford-useofmonitorsmemo-03072008.pdf.
6 Indeed, DOJ may already be sending that message. See, e.g., Ericsson, Press Release, Update on Deferred Prosecution Agreement (Oct. 21, 2021), available at https://www.ericsson.com/en/press-releases/2021/10/update-on-deferred-prosecution-agreement.
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