Deputy Attorney General Lisa Monaco was unequivocal in announcing the new Justice Ministry enforcement priorities: the agency will step up oversight of companies, their employees and, in particular, their leaders.
On Thursday October 28, Lisa Monaco gave the opening speech at the 36th ABA National Institute on White Collar Crime. Monaco spoke in detail about the department’s renewed focus on corporate compliance, announced new guidance on corporate lawsuits, and highlighted areas ripe for new regulation. In order to maintain its reinvigorated focus on commercial players, the department is increasing its resources for prosecutors and investigators. The department’s increased control over individual players follows other enforcement developments, such as an increased focus on cyber attacks, data breaches, and cryptocurrencies. The government hopes these new tools will raise the specter of accountability, which in turn will boost business compliance.
Monaco also used the speech to announce three concrete changes in the DOJ’s approach to white collar crime. First, the department “will revert to previous guidelines making it clear that in order to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about those involved or responsible for the misconduct in question.” Under this new directive, companies subject to prosecution no longer have the right to determine for themselves which actors were substantially involved and what information should be transmitted. Instead, companies will need to open access to all individuals, even those with minimal or peripheral involvement.
Second, when deciding what resolution to propose to a target business, the ministry “will now examine the entire criminal, civil and regulatory record of any business.” This means, for example, that a company accused of an FCPA violation will have its all case reviewed by every corner of the department, including the tax division, the environment and natural resources division, money laundering sections and even the US attorney’s offices.
Finally, the ministry will naturally begin to implement corporate monitors.
Taken together, the new ministry guidelines represent a dramatic increase in prosecution scrutiny and a significant entanglement of topics. In the face of an investigation, corporate counsel will no longer be able to decide what information they are required to disclose. Instead, in every action, companies will be forced to hand over a wealth of information and subject a litany of employees to government scrutiny. This expanded openness will necessarily capture high-ranking officers, employees with less sophisticated backgrounds, and those unfamiliar with government investigations. The new guidelines also require corporate legal advisers to have a clear and complete picture of their company’s accountability, as even unrelated violations now weigh heavily on every resolution. Even after resolution, businesses will have to navigate their work under the eye of a corporate monitor, leaving little room for error.
Monaco ended with an overview of the reforms envisaged by the department, such as the refusal to offer non-prosecution agreements (NPA) and deferred prosecution agreements (DPA) for “repeat companies”, requiring stricter compliance with the terms. NPAs and DPAs and the formation of a new advisory group within the ministry.
This heavy application environment demands a team capable of advising clients from diverse backgrounds, providing expertise in all disciplines, and making decisions informed by decades of experience working with or as regulators. Lawyers in our Government Investigations & White Collar Defense group have advised a wide range of clients facing federal investigations, from executives of multinational companies to entrepreneurs entering the world of business for the first time. Whether your business is navigating the changing compliance landscape or responding to an ongoing investigation, our experienced team of legal professionals are ready to assist you when the need arises.