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When a company uncovers criminal misconduct within its operations, the Department of Justice (DOJ) has clarified that voluntary self-disclosure is the clearest path to avoiding an indictment. To encourage companies to come forward, the DOJ recently announced an updated policy that increases incentives for self-disclosure, cooperation, and remediation. The Assistant Attorney General for the DOJ’s Criminal Division, John D. Polite Jr., has emphasized that even companies with aggravating factors will be eligible for declinations if they demonstrate extraordinary cooperation and remediation.
The new policy allows companies to receive a 75 percent reduction off the low end of the fines guideline range if they self-disclose, up from the previous 50 percent reduction. Companies that do not self-disclose can receive a 50 percent reduction if they provide full cooperation and appropriate remediation.
The DOJ noted that its new policy is intended to incentivize companies to come forward when criminal misconduct is discovered. It also highlighted the importance of having an effective compliance program to help a company detect misconduct and make an informed decision about self-disclosing.
The DOJ is expecting more of companies than ever before when it comes to voluntarily self-disclosing misconduct. Companies facing criminal charges should consider the new policy when deciding how to proceed, as the incentives for self-disclosing, cooperating, and remedying wrongdoing are more significant than ever.
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At the same time, voluntary self-disclosure is a difficult decision that should not be taken lightly. A company must carefully weigh all the risks and benefits of such a disclosure before taking action. Companies should have a well-developed corporate compliance program to help them quickly identify and address any misconduct.
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Ultimately, the DOJ’s new policy reminds companies how important it is for them to come forward when they uncover criminal wrongdoing within their operations. Companies should be aware of the new standards imposed and the incentives for self-disclosure and cooperation and take steps to ensure they are prepared to identify and respond to any misconduct quickly. Doing so will help protect companies from costly criminal liability in the long run.
REFERENCES:
DOJ Criminal Division Announces Key Changes to Corporate Enforcement Policy
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