DOJ Announces Return to More Aggressive Corporate Enforcement

In a long-awaited policy announced in an October 28, 2021, speech at the ABA Institute on White Collar Crime, the Department of Justice has embarked on more aggressive enforcement of white collar and corporate prosecution. During the Trump Administration, such prosecutions reached historic lows, but that is about to change. Deputy Attorney General Lisa Monaco announced significant changes to DOJ policies on corporate enforcement. Monaco noted in recent years, corporate misconduct, such as export controls violations and cybersecurity crimes, has implicated national security concerns to a greater extent. Monaco announced that DOJ would deploy greater “surge” resources to aid in investigating and prosecuting large complex cases.

In a speech earlier in October 2021, Principal Associate Deputy Attorney General John Carlin outlined new methods DOJ will use in investigations, including increased use of data-driven analytics to identify areas of investigation. In addition to greater resources and new methods, DOJ will seek to fight corporate crime by taking more aggressive policy positions in three key areas.

1. Individual Accountability. Monaco announced that DOJ will turn away from a previously-softened stance on holding individuals acceptable for corporate wrongdoing. Under DOJ’s return to its more hard-line policy referred to as the “Yates Memo,” prosecutors will once again require companies to provide information on all individuals involved in wrongdoing before the company can receive credit for cooperating with a DOJ investigation. Previously, Monaco’s predecessor, Rod Rosenstein, required companies to identify only those individuals who played “significant roles” in a company’s criminal conduct, thus allowing companies more flexibility to refrain from targeting individuals at the margins of wrongdoing.

2. Broader Consideration of Past Corporate Misconduct. Monaco then stated that DOJ will begin considering the “full civil, criminal, and regulatory record” of a company’s past misconduct when determining an acceptable resolution of a matter under investigation. For example, “[a] prosecutor in the FCPA unit needs to… [ask whether] this company run afoul of the Tax Division, the Environment and Natural Resources Division, the money laundering sections, the U.S. Attorney’s Offices, and so on…” This broader review of past misconduct will create greater exposure for companies in highly regulated industries, where the likelihood of previous enforcement actions is greater.

3. Return to Monitorships. Monaco announced that the trend away from using corporate monitors as part of an enforcement resolution has ended. “To the extent that prior Justice Department guidance suggested that monitorships are disfavored or are the exception, I am rescinding that guidance.” Monaco explained that monitorships are a valuable DOJ tool to verify that a company is living up to its compliance and disclosure obligations, and one which DOJ will continue to require in circumstances it deems appropriate.

With these changes, DOJ clarified that any perceived era of relaxed corporate enforcement is over. In fact, Monaco stated that these measures are “only the first steps” in DOJ’s commitment to pursuing corporate crime. In response, companies should carefully review their corporate compliance policies to ensure that they are up to the task of finding and remediating weaknesses that may allow for misconduct.

If you have any questions about the information in this alert, please contact Jonathan Feld (312-627-5680 or jfeld@dykema.com), Jason Ross (214-462-6417 or jross@dykema.com), Becky James (210-554-5527 or bjames@dykema.com), or your Dykema relationship attorney.