SDNY’s new self-disclosure program offers big changes rooted in DOJ’s yearslong efforts to dangle carrots

The U.S. Attorney's Office for the Southern District of New York ("SDNY") recently announced a program that offers companies greater incentives to voluntarily self-disclose financial crimes involving fraud. The SDNY program follows changes made by the Department of Justice's Criminal Division to its corporate enforcement policy last year (see our May 14, 2025 Client Alert). The new SDNY program is important for corporate legal and compliance departments to understand as they navigate DOJ's evolving efforts to reward self-reports and cooperation.

On February 24, 2026, U.S. Attorney Jay Clayton unveiled the SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (the "SDNY Program" or "Program").¹ The purpose of the Program is to "encourage early voluntary self-disclosure of criminal conduct" and "provide companies with greater certainty when reporting potential financial misconduct to federal prosecutors."² The Program applies to corporate fraud, including securities and commodities fraud, false statements or fraud upon an auditor or federal regulator of financial markets, and various forms of market misconduct, such as insider trading, spoofing, and market manipulation. It does not apply, however, to other corporate offenses, including foreign corruption, economic sanctions, and anti-money laundering offenses.³ The SDNY Program follows an announcement late last year by Deputy Attorney General Todd Blanche that the Department of Justice ("DOJ") would be issuing a Department-wide policy on voluntary self-disclosures ("VSD") to ensure consistency across all DOJ components.   The SDNY Program differs in significant respects from the Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy ("CEP")⁴ and the United States Attorney's Offices' Voluntary Self-Disclosure Policy,⁵ raising questions about how a unified DOJ policy will treat VSDs and highlighting factors for companies to consider in determining whether and where to make a self-report. In this client alert, our team assesses the SDNY Program and advances suggestions for the ultimate Department-wide policy.

DOJ's Evolving Self-Reporting Landscape

The SDNY Program continues yearslong efforts by the DOJ to encourage self-reporting by corporations. For many years, the Antitrust Division's Corporate Leniency Policy for criminal antitrust cases, which dates to the 1990s, was the Department's primary VSD policy. Then, in 2016, the DOJs Criminal Division launched the Foreign Corrupt Practices Act ("FCPA") Pilot Program designed to incentivize companies to voluntarily self-disclose FCPA-related misconduct.⁶ Since then, the Department has steadily expanded its VSD programs. In 2018, the Criminal Division extended the FCPA Pilot Program to acquiring/successor corporations in M&A transactions⁷ outside the FCPA context to all corporate criminal cases.⁸ Subsequently renamed as the CEP and incorporated into the Justice Manual, the Criminal Division has further refined the program over the years, providing greater benef'its and greater certainty to companies that voluntarily self-disclose misconduct, fully cooperate, and timely and appropriately remediate the misconduct absent aggravating circumstances.

Other DOJ components also announced their own VSD programs. In 2016, the National Security Division announced its first VSD policy, which was most recently updated in March 2024.⁹ And in 2023, after then-Deputy Attorney General Lisa Monaco instructed that each DOJ component that prosecutes corporate crime must implement a written policy to incentivize self-disclosures, the U.S. Attorney's Offices issued a VSD policy that applied to all U.S. Attorney's Offices nationwide.¹⁰

The most recent iteration of the CEP offers the strongest incentives and the greatest benefits for companies to self-report misconduct outside the antitrust context, namely, a declination of prosecution for companies that (1) timely and voluntarily self-report; (2) fully cooperate; and (3) timely and appropriately remediate, in the absence of aggravating circumstances. The SDNY Program, while it covers a narrower range of illegal activity, provides the strongest incentives yet and appears to be modeled on the Antitrust Division’s leniency program. That program includes the offer of a conditional leniency letter early in an investigation, though it is available only to the first party involved in a course of conduct that makes a self-report.¹¹ By providing greater clarity and predictability, the Antitrust Division has had more success in encouraging companies to self-report than have other DOJ components.

Some of the key differences between the SDNY Program and the CEP include the following:

1. Application to financial frauds. As noted, whereas the CEP applies broadly to corporate misconduct prosecuted by the Criminal Division, the SDNY Program only applies to financial frauds. It does not apply to other corporate offenses, including foreign corruption, economic sanctions, or anti-money laundering offenses.
2. Timing of the declination. The biggest difference between the SDNY Program and the CEP is the timing of the benefit for self-reporting misconduct to the government. Unlike the CEP, which offers a guaranteed declination of prosecution to qualifying companies at the conclusion of the government's investigation, the SDNY Program provides a "clear, agreed-upon path to a declination" at the outset of the investigation.¹² Specifically, the Program states that "shortly after a company makes a self-report," the SDNY will issue a conditional declination letter stating its intent to decline prosecution (so long as the company fulfills obligations to cooperate, remediate, and pay restitution to any victims), which the company can expect "within two to three weeks of making a self-report."¹³ Then, after satisfying these obligations, the SDNY will send the company a "final notice of declination," "concluding the matter without criminal charges" and triggering a three-year requirement to report all credible evidence or allegations of criminal conduct by its personnel to the SDNY.¹⁴ This offers companies greater clarity at an earlier stage of the investigation, shortly after the voluntary disclosure, rather than at the conclusion of an investigation, which can stretch for several years.
3. Government's knowledge of the information. Another key difference is how the CEP and the SDNY Program define whether a self-disclosure is "voluntary." Under the CEP, a self-disclosure is deemed to be "voluntary" only if, among other requirements, "the misconduct is not previously known to the Department of Justice," with an exception in certain limited circumstances for whistleblower reports.¹⁵ The CEP provides benefits short of a declination for a "near miss" VSD, that is, where a company makes a self-report in good faith but the self-report does not qualify as voluntary because, for example, the DOJ already knew of the misconduct. By contrast, under the SDNY Program, the disclosure "must be made before the company learns of the existence of a government investigation."¹⁶ This means that a company that self-reports will still receive the benefit of a conditional declination in the SDNY even where the government, unbeknownst to the company, already knows about or is investigating the same information, including where the company knows a whistleblower has made a report to a government agency or there has been a press report about the illegal activity.
4. Aggravating circumstances. The two policies also differ in their treatment of aggravating circumstances. Under the CEP, prosecutors have greater discretion to determine the appropriate resolution where there are "aggravating circumstances" related to the "nature and seriousness of the offense," the "egregiousness or pervasiveness of the misconduct within the company," the "severity of harm caused by the misconduct," and the recidivism the company.¹⁷ Under the SDNY Program, "aggravating circumstances" are linked to the substantive nature of the corporate misconduct, namely, "any nexus to terrorism, sanctions evasion, foreign corruption, sex trafficking, human trafficking and smuggling, international drug cartels, slavery, forced labor, or physical violence, including the knowing or reckless financing of these activities or laundering of funds in support of these activities." Prosecutors will not treat as an aggravating or disqualifying circumstance the "seriousness" or "pervasiveness" of the conduct, "past criminal adjudications," or "the involvement of senior leaders."¹⁸ This is a significant departure from prior VSD programs, which sought to incentivize self-disclosures while leaving discretion to pursue another form of resolution where warranted by the facts and circumstances. One consequence of the traditional approach is that most VSDs have involved misconduct that is relatively small in scale; companies simply have not self-reported the most significant offenses. The Criminal Division sought to mitigate this issue in 2024 by eliminating from the list of aggravating circumstances the amount of profits resulting from the offense.¹⁹ The SDNY Program provides incentives for companies to self-report more significant misconduct, even where there are multiple aggravating circumstances, such as corporate recidivism and involvement by senior management.
5. No disgorgement of profits. The SDNY Program requires companies to pay restitution to all injured parties, but companies will not be required to forfeit or disgorge profits obtained as a result of the misconduct. This is a significant departure from the CEP and the DOJ's other VSD programs, which require companies both to pay restitution to victims and to disgorge any profits resulting from the misconduct.

The DOJ's Next Generation VSD Policy

The SDNY Program provides greater benefits to companies that self-report financial frauds than the DOJ's prior VSD policies, including the CEP. Most notably, it provides greater certainty about the outcome of a self-report by (1) offering a conditional declination within a few weeks of a self-report and (2) minimizing discretion by excluding the traditional "aggravating circumstances" from the list of disqualifying factors—some of which are inherently subjective—and replacing them with a relatively clearly defined list of types of conduct. If the DOJ intends to institute a single corporate VSD program for the Department as a whole and wants to incentivize companies to self-report the most serious misconduct so that it can focus its enforcement resources on holding culpable individuals accountable, it will need to consider steps like these, which are a significant departure from prior practice. Even these steps, however, may not be sufficient to encourage more companies to make self-reports. To accomplish that goal, the DOJ should consider the following:

• Eliminating the three-year reporting requirement. The SDNY Program, unlike the CEP, provides that a company must report any credible evidence or allegation of criminal conduct by the company or its personnel for a period of three years following a notice of final declination. This sort of reporting requirement is a substantial burden and may dissuade companies from coming forward, and the requirement is not directly related to the primary goal of VSD policies—encouraging corporate self-reports to increase individual accountability for misconduct. Requiring ongoing cooperation related to the subject matter of the self-report should be sufficient.
• Affording voluntary self-disclosure credit to a company that makes a self-report to a federal civil enforcement agency. To date, the DOJ's VSD policies—including the SDNY Program—require a self-report to the DOJ for a company to receive VSD credit. Giving companies credit for self-reporting to civil enforcement agencies like the U.S. Securities and Exchange Commission ("SEC") and leaving those agencies to determine whether a criminal referral is appropriate may lead to more self-reports to U.S. enforcement agencies than we currently see.
• Providing global declinations. Declinations under the SDNY Program and the CEP bind only the DOJ offices that issue the declinations. For some types of offenses, such as FCPA and sanctions offenses, no more is required to protect the company that makes a self-report, because only the Criminal Division and the National Security Division, respectively, can authorize prosecutions for those offenses. By contrast, the Criminal Division and any U.S. Attorney's Office can bring a corporate prosecution for financial fraud. Given that the SDNY Program offers the prospect of a declination to a company with a history of recidivism and even where senior executives were involved or the conduct was pervasive, providing a global declination binding all districts and divisions would safeguard against future prosecutions by DOJ components that disagree with a single office's declination decision.
• Defining what qualifies as a "timely" self-disclosure. Under the SDNY Program, like the CEP, prosecutors retain significant discretion to determine whether a self-report was timely. The Department has treated at least one self-report as not "reasonably prompt" and, on that basis, did not decline prosecution and instead entered into a non-prosecution agreement with the company. The DOJ could provide greater certainty on this issue by providing that any self-report within, for example, six months of discovery of the issue is "timely." Such a bright-line rule would allow companies to make a better informed assessment of whether and when to make a self-report.
• Non-public declinations. The DOJ could also encourage companies to self-report by agreeing that the government will not publicly disclose a declination of prosecution. The Justice Manual has long recognized the value of "limit[ing] undue damage to reputation" of companies that cooperate with the government.²⁰ And the Antitrust Division states that it "does not publicly disclose the identity of a leniency applicant or information provided by the applicant, absent prior disclosure by, or agreement with, the applicant, unless required to do so by court order in connection with litigation."²¹

The extent to which the DOJ seeks to incentivize VSDs is a policy choice. Over the last few years, the Department has created increasingly stronger and clearer incentives for companies to self-report misconduct through the promise of a declination of prosecution and other substantial benefits, while maintaining discretion to pursue another form of resolution when warranted by the facts and circumstances and requiring forfeiture or disgorgement of any profits resulting from the offense. Judged by the low number of declination letters issued by the DOJ, there continues to be few self-reports. The SDNY Program appears to signal a different policy approach by creating much stronger incentives for self-reporting and fundamentally reconceiving what is an "aggravating circumstance." If the Department wishes to fully incentivize companies to self-report the most significant misconduct and prioritize individual accountability over corporate enforcement, it should consider implementing a policy that includes the provisions described above.

Conclusion

The SDNY Program is clearly more business-friendly than other similar VSD programs in the past. To produce dramatically different results than prior VSD programs, however, the DOJ will need to provide even clearer benefits and minimize downside risks to companies for self-reporting. The Deputy Attorney General's forthcoming Department-wide policy could make important strides in encouraging self-reporting by addressing the issues that cause companies to hesitate before disclosing illegal activity to the government.

White & Case's White Collar and Investigations Group will continue to cover the implementation of the Department's new guidance and policies on corporate self-disclosure and cooperation and highlight key takeaways for corporations.

_{1 SDNY Corporate Enforcement and Voluntary Self-Disclosure Program for Financial Crimes (effective February 24, 2026), available here. 
2 Id. at 1.
3 Max Fillion, Justice Department Prepping Single Policy for All Corporate Criminal Cases, Dow Jones Risk Journal (December 11, 2025), available here.
4 Justice Manual § 9-47.120 – Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy (2025), available here.
5 United States Attorneys' Offices Voluntary Self-Disclosure Policy (2023), available here.
6 Criminal Division Launches New FCPA Pilot Program (2016), available here.
7 Deputy Assistant Attorney General Matthew S. Miner Remarks at the American Conference Institute 9th Global Forum on Anti-Corruption Compliance in High Risk Marekts (2018), available here.
8 Principal Deputy Assistant Attorney General John P. Cronan Delivers Remarks at Practicing Law Institute Event (2018), available here.
9 NSD Enforcement Policy for Business Organizations, available here; Export Control and Sanctions Enforcement Policy for Business Organizations, available here.
10 Supra note 5. 
11 DOJ Antitrust Division Leniency Policy and Procedures, available here. 
12 Supra note 1, at 1.
13 Id. at 1,5.
14 Id.
15 Supra note 3, at Appendix B. 
16 Supra note 1, at 2-3.  
17 Supra note 3, at Justice Manual § 9-47.120.
18 Supra note 1, at 4. 
19 Principal Deputy Assistant Attorney General Nicole Argentieri Remarks on Transparency in Criminal Division Enforcement (November 22, 2024), available here 
20 Justice Manual § 9-28.700 - The Value of Cooperation, Principles of Federal Prosecution of Business Organizations, available here.
21 DOJ, Frequently Asked Questions about the Antitrust Division's Leniency Program and Model Leniency Letters (2017), available here.}

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